Document:

QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.1    
    

 
 

UNITED STATIONERS INC.    
    

 
  Directors Grant Plan
  (as amended through March 19, 2003)    

	1.
	PURPOSE 

        United
Stationers Inc., a Delaware corporation (the "Company") by means of this Directors Grant Plan (the "Plan") desires to retain outstanding individuals who are not employees
of the Company or its affiliates as directors of the Company and to provide additional incentives for such directors to achieve the objectives and promote the business success of the Company by
providing to such individuals additional opportunities to acquire common shares of the Company ("Shares") through the settlement of deferred stock units ("Deferred Stock Units") and thereby provide
such individuals with a greater proprietary interest in and closer identity with the Company and its financial success. 

	2.
	ADMINISTRATION 

        The
Plan shall be administered by the Board of Directors or by such committee of the Board of Directors, as determined by the Board of Directors of the Company (the "Committee"). The
Committee shall interpret the Plan and shall prescribe, amend and rescind rules and regulations relating thereto and make all other determinations necessary, advisable or desirable for the
administration of the Plan. Any such action by the Committee shall be final and conclusive on all persons having any interest in the Deferred Stock Units or Shares to which such action relates. A
majority of the Committee shall constitute a quorum and the acts of a majority of the members present at any meeting at which a quorum is present, or acts approved in writing by a majority of the
Committee, shall be the acts of the Committee. 

        The
Committee may delegate to one or more of its members, or to one or more agents, such administrative duties as it may deem advisable, and the Committee or any person to whom it has
delegated duties as aforesaid may employ one or more persons to render advice with respect to any responsibility the Committee or such person may have under the Plan. 

	3.
	SHARES 

        The
aggregate number of Shares which may be issued under this Plan for Deferred Stock Units shall not exceed 250,000 Shares, subject to adjustment pursuant to Section 6(c).
Deferred Stock Units granted under the Plan may be settled in accordance with the terms of the Plan with either authorized and unissued shares of the common stock of the Company or issued shares of
such common stock held in the Company's treasury. 

	4.
	PARTICIPATION 

        The
"Participants" in the Plan will consist of directors of the Company who are not employees of the Company or any affiliate of the Company. 

	5.
	DEFERRED STOCK UNITS 

        At
such times as determined by the Board of Directors of the Company (individually, "Grant Date"), each director of the Company who is not an employee of the Company or any affiliate of
the Company may be granted each year up to 4,000 Deferred Stock Units as determined by the Board in its sole discretion. The award of any Deferred Stock Units may be subject to other provisions
(whether or not applicable to the Deferred Stock Unit awarded to any other Participant) as the Committee, in its sole discretion determines appropriate, including, without limitation, restrictions on
resale or other disposition and such provisions as may be appropriate to comply with federal or state securities laws and stock exchange requirements. 

	6.
	STOCK UNIT ACCOUNT AND ADJUSTMENT OF DEFERRED STOCK UNITS

	a.
	STOCK
UNIT ACCOUNTS.    A Stock Unit Account will be established for each Participant. All Deferred Stock Units shall be credited to the Participant's Stock Unit Account. Any
settlements or distributions pursuant to Section 8(b) shall be deducted from Participant's Stock Unit Account.

	b.
	CREDITING
OF DIVIDEND EQUIVALENTS.    As of each dividend or other distribution payment date with respect to Shares, each Participant shall have credited to the Participant's
Stock Unit Account a dollar amount equal to the amount of cash dividends or the fair market value (as determined in good faith by the Committee) of the property other than Shares that would have been
paid or distributed on the number of Shares equal to the number of Deferred Stock Units credited to the Participant's Stock Unit Account as of the close of business on the record date for such
dividend or distribution. Such dollar amount shall then be converted into a number of Deferred Stock Units equal to the number of whole and fractional Shares that could have been purchased at Fair
Market Value on the dividend payment or distribution date with such dollar amount. In the case of any dividend declared on Shares which is payable in Shares, each Participant's Stock Unit Account
shall be increased by the number of Deferred Stock Units equal to the product of (i) the number of Deferred Stock Units credited to the Participant's Stock Unit Account on the related dividend
record date and (ii) the number of Shares (including any fraction thereof) distributable as a dividend on a Share. Deferred Stock Units which are credited to a Participant's Stock Unit Account
pursuant to this Section 6.b. shall be subject to the same terms and conditions of the Plan and deferral elections of Deferred Stock Units applicable to the Participant's other Deferred Stock
Units.

	c.
	CAPITAL
ADJUSTMENTS.    If the Shares should, as a result of any stock split, other subdivision or combination of Shares, or any reclassification, recapitalization or
otherwise, be increased or decreased, the number of outstanding Deferred Stock Units and the total number of Shares reserved for issuance under this Plan shall be adjusted as determined by the
Committee to reflect such action. Any new Shares or other securities issued with respect to Shares shall be deemed Shares. In the event of any stock split, recapitalization, reorganization or other
transaction affecting the capital structure of the Company, the Committee shall make such adjustments to the number of Deferred Stock Units credited to each Participant's Stock Unit Account as the
Committee shall deem necessary or appropriate to prevent the dilution or enlargement of such Participant's rights.

	d.
	SALE
OR REORGANIZATION.    Subject to Section 7, in the event the Company is merged or consolidated with another entity, or in the event the property or Shares of the
Company are acquired by another entity, or in the event of a reorganization of the Company, or in the event of any extraordinary transaction ("Transaction"), the board of directors of any corporation
or comparable governing body of any other type of entity, assuming the obligations of the Company hereunder or the Committee, as applicable, shall have the right to provide for the continuation of
Deferred Stock Units granted under the Plan with respect to the Shares provided they remain publicly-traded or with respect to any publicly-traded equity securities into which the Shares are
converted. If provision for such continuation of Deferred Stock Units after a Change of Control or other Transaction is not made, Participants shall receive either prior to such Change of Control or
other Transaction the number of Shares equal to the Deferred Stock Units credited to their Stock Unit Account so they may participate in such Change of Control transaction or other Transaction in the
same manner and to the same extent as stockholders with a number of Shares equal to the Participants' number of Deferred Stock Units or shall receive at the same time and in the same manner the same
securities, cash, notes or other property or assets as if they were stockholders with a number of Shares equal to the number of Deferred Stock Units credited to their Stock Unit Account. 

	e.
	FAIR
MARKET VALUE.    Except as otherwise provided herein, "Fair Market Value" for a Share for a day shall be the closing price per Share on such day on the principal
exchange on which Shares are listed or admitted to trading; if Shares are listed or admitted to trading on an exchange but such day is not a trading day, Fair Market Value shall be determined as of
the last preceding trading day. If the preceding sentence is not applicable, Fair Market Value shall be determined in good faith by the Committee.

 

	7.
	CHANGE OF CONTROL 

        For
the purposes of this Plan, a Change of Control means: 

	a.
	Any
"Person" (having the meaning ascribed to such term in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended ("1934 Act") and used in Sections 13(d) and 14(d)
thereof, including a "group" within the meaning of Section 13(d)(3)) has or acquires "Beneficial Ownership" (within the meaning of Rule 13d-3 under the 1934 Act) of 30% or
more of the combined voting power of the Company's then outstanding voting securities entitled to vote generally in the election of directors ("Voting Securities"); provided, however, that in
determining whether a Change of Control has occurred, Voting Securities which are held or acquired by (i) the Company or any of its subsidiaries or (ii) an employee benefit plan (or a
trust forming a part thereof) maintained by the Company or any of its subsidiaries shall not constitute a Change of Control. Notwithstanding the foregoing, a Change of Control shall not be deemed to
occur solely because any Person acquired Beneficial Ownership of more than the permitted amount of Voting Securities as a result of the issuance of Voting Securities by the Company in exchange for
assets (including equity interests) or funds with a fair value equal to the fair value of the Voting Securities so issued; provided that if a Change of Control would occur (but for the operation of
this sentence) as a result of the issuance of Voting Securities by the Company, and after such issuance of Voting Securities by the Company, such Person becomes the Beneficial Owner of any additional
Voting Securities which increases the percentage of the Voting Securities Beneficially Owned by such Person to more than 50% of the Voting Securities of the Company, then a Change of Control shall
occur.

	b.
	At
any time during a period of two consecutive years, the individuals who at the beginning of such period constituted the Board (the "Incumbent Board") cease for any reason to
constitute more than 50% of the Board; provided, however, that if the election, or nomination for election by the Company's stockholders, of any new director was approved by a vote of more than 50% of
the directors then comprising the Incumbent Board, such new director shall, for purposes of this subsection b., be considered as though such person were a member of the Incumbent Board; provided,
further, however, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of (i) either an actual "Election Contest" (as
described in Rule 14a-11 promulgated under the 1934 Act) or other actual solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board (a "Proxy
Contest"), or (ii) by reason of any agreement intended to avoid or settle any actual or threatened Election Contest or Proxy Contest.

	c.
	Consummation
of a merger, consolidation or reorganization or approval by the Company's stockholders of a liquidation or dissolution of the Company or the occurrence of a liquidation or
dissolution of the Company ("Business Combination"), unless, following such Business Combination:

	(i)
	the
Persons with Beneficial Ownership of the Company, immediately before such Business Combination, have Beneficial Ownership of more than 50% of the combined voting
power of the then outstanding voting securities entitled to vote generally in the election of directors of the corporation (or in the election of a comparable governing body of any other type of
entity) resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company's assets
either directly or through one or more subsidiaries) (the "Surviving Company") in substantially the same proportions as their 

Beneficial
Ownership of the Voting Securities immediately before such Business Combination; 

	(ii)
	the
individuals who were members of the Incumbent Board immediately prior to the execution of the initial agreement providing for such Business Combination constitute
more than 50% of the members of the board of directors (or comparable governing body of a noncorporate entity) of the Surviving Company; and

	(iii)
	no
Person (other than the Company, any of its subsidiaries or any employee benefit plan (or any trust forming a part thereof) maintained by the Company, the Surviving
Company or any Person who immediately prior to such Business Combination had Beneficial Ownership of 30% or more of the then Voting Securities) has Beneficial Ownership of 30% or more of the then
combined voting power of the Surviving Company's then outstanding voting securities. Notwithstanding this subsection (iii), a Change of Control shall not be deemed to occur solely because any Person
acquired Beneficial Ownership of more than 30% of Voting Securities as a result of the issuance of Voting Securities by the Company in exchange for assets (including equity interests) or funds with a
fair value equal to the fair value of the Voting Securities so issued.

	d.
	Approval
by the Company's stockholders of an agreement for the assignment, sale, conveyance, transfer, lease or other disposition of all or substantially all of the assets of the
Company to any Person (other than a subsidiary of the Company or other entity, the Persons with Beneficial Ownership of which are the same Persons with Beneficial Ownership of the Company and such
Beneficial Ownership is in substantially the same proportions), or the occurrence of the same. 

        Notwithstanding
the foregoing, a Change of Control shall not be deemed to occur solely because any Person acquired Beneficial Ownership of more than the permitted amount of Voting
Securities as a result of the acquisition of Voting Securities by the Company which, by reducing the number of Voting Securities outstanding, increases the proportional number of shares Beneficially
Owned by such Person; provided that if a Change of Control would occur (but for the operation of this sentence) as a result of the acquisition of Voting Securities by the Company, and after such
acquisition of Voting Securities by
the Company, such Person becomes the Beneficial Owner of any additional Voting Securities which increases the percentage of the Voting Securities Beneficially Owned by such Person, then a Change of
Control shall occur. 

	8.
	SETTLEMENT OF DEFERRED STOCK UNITS

	a.
	TIMING
OF PAYMENT.

	(i)
	Normal
Distribution.    Except as otherwise provided by a deferral election in accordance with Section 8.a.(iii) or earlier settlement in
connection with a Change of Control as set forth in Section 8.a.(ii), a Participant (or the Participant's beneficiary or guardian, as applicable) shall receive or begin receiving a distribution
of the Participant's vested Deferred Stock Units in the Participant's Stock Unit Account in the manner described in Section 8(b) either on or as soon as administratively feasible after the
earliest of (i) the fifth anniversary of the grant of the Deferred Stock Units, (ii) the Participant's death, or (iii) the Participant's Disability.

	(ii)
	Change
of Control.    A Participant (or the Participant's beneficiary or guardian, as applicable) shall receive a distribution of the Participant's Deferred
Stock Units in the Participant's Stock Unit Account in the manner described in Section 8(b) immediately prior to a Change of Control.

	(iii)
	Deferral.    Notwithstanding
Section 8.a.(i) or 8.a.(ii), a Participant may deliver an election to defer the distribution or commencement of
distribution to the Treasurer of the Company or his or her designee at least one year before the fifth anniversary of the grant of the Deferred Stock Units. If the Participant has made such an
election to defer 

payment
in accordance with this Section 8.a.(iii), the Participant shall receive or begin receiving a distribution of the Participant's vested Deferred Stock Units in the Participant's Stock
Unit Account on or as soon as administratively feasible following the date or dates to which the Participant elected to defer payment. Notwithstanding the foregoing, all deferral elections made by a
Participant shall be revoked immediately prior to a Transaction described in the second sentence of Section 6.d., a Change of Control or the Participant's Disability or death unless the
Participant's deferral election specifically states otherwise. 

	(iv)
	Committee
Authority.    Notwithstanding anything herein to the contrary, the Committee may in its sole discretion at any time (including without limitation,
upon a Participant's failure to be reelected as a director or a Participant's resignation as a director) accelerate settlement and payment of Deferred Stock Units.

	b.
	PAYMENT.    The
Participant's Stock Unit Account will be settled by delivering to the Participant the number of Shares equal to the number of whole Deferred Stock Units then
credited to the Participant's Stock Unit Account, in either a lump sum or any installment or other method elected in accordance with Section 8.a.(iii). Any fractional Deferred Stock Unit
credited to a Participant's Stock Unit Account at the time of a distribution shall be paid in cash at the time of such distribution.

	c.
	PAYMENT
UPON DEATH OF A PARTICIPANT.    If a Participant dies before the entire balance of the Participant's Deferred Stock Unit Account has been distributed, the balance of
the Participant's Deferred Stock Unit Account shall be paid to the beneficiary designated by the Participant or if no beneficiary has been designated, to the Participant's estate or beneficiary deemed
appropriate by the Committee.

	d.
	CONTINUATION
OF DIVIDEND EQUIVALENTS AND OTHER ADJUSTMENTS.    If payment of Deferred Stock Units is deferred pursuant to Section 8.a.(iii), the Participant's Stock
Unit Account shall continue to be credited with dividend equivalents and be subject to other adjustment as provided in Section 6 until the entire balance of the Participant's Stock Unit Account
has been distributed.

 

	9.
	LIMITATIONS ON TRANSFERABILITY 

        No
Deferred Stock Unit granted to a Participant shall be transferable by the Participant except by will or by the laws of descent and distribution. 

	10.
	LEGAL AND OTHER REQUIREMENTS 

        Each
Deferred Stock Unit granted under this Plan shall be subject to the requirement that if at any time the Committee shall determine, in its discretion, that the listing, registration
or qualification of the Shares issuable or transferable upon the settlement of the Deferred Stock Unit upon any securities
exchange or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with the granting of such
Deferred Stock Unit, or the issuance or transfer of Shares thereunder, such Deferred Stock Unit may not be settled in whole or in part unless such listing, registration, qualification, consent, or
approval shall have been effected or obtained free of any conditions not acceptable to the Committee. The Company shall not be obligated to sell or issue any Shares in any manner in contravention of
the Securities Act of 1933, as amended ("Securities Act"), or any state securities law. No adjustment with respect to any Shares with respect to which Deferred Stock Units have been granted other than
pursuant to Section 6 hereof shall be made for dividends or other rights for which the record date is prior to the date such stock certificate is delivered. 

        If
a registration statement under the Securities Act with respect to Shares issuable upon settlement of Deferred Stock Units, is not in effect at the time such Deferred Stock Units are
settled, the Company may require, for the sole purpose of complying with the Securities Act, that prior to delivering such common stock to the Participant whose Deferred Stock Units are being settled,
such 

Participant
must deliver to the Secretary of the Company a written statement (i) representing and warranting that such Shares are being acquired for investment only and not with a view to the
resale or distribution thereof, (ii) acknowledging and confirming that such Shares may not be sold unless registered for sale under the Securities Act or pursuant to an exemption from such
registration and (iii) agreeing that the certificates representing such Shares shall bear a legend to the effect of the foregoing. 

	11.
	WITHHOLDING TAXES 

        To
the extent required by law, the Company shall comply with the obligations imposed on the Company under applicable tax withholding laws, if any, with respect to Deferred Stock Units
granted hereunder, Shares transferred upon settlement thereof, and the disposition of such Shares thereafter, and shall be entitled to do any act or thing to effectuate any such required compliance,
including, without limitation, withholding from amounts payable by the Company to a Participant and making demand on a Participant for the amounts required to be withheld. 

	12.
	EFFECT ON DIRECTOR AND STOCKHOLDER STATUS 

        Neither
the adoption of this Plan nor the grant of any Deferred Stock Units, nor ownership Deferred Stock Units or Shares shall be deemed or construed to obligate the Company to continue
the
appointment or engagement of any Participant as a director or otherwise for any particular period. The Deferred Stock Units and the Shares acquired pursuant to the settlement of such Deferred Stock
Units are a matter of separate inducement and are not in lieu of any compensation for services. No Deferred Stock Unit confers upon any Participant any rights as a stockholder of the Company prior to
the date on which the Participant fulfills all conditions for receipt of such rights. 

	13.
	INDEMNIFICATION OF COMMITTEE 

        No
member or agent of the Committee shall be personally liable for any action, determination or interpretation made with respect to the Plan and each member of the Committee shall be
indemnified by the Company to the fullest extent permitted by Delaware law and the governing instruments of the Company. 

	14.
	AMENDMENT OR TERMINATION OF PLAN 

        The
Committee may amend or terminate this Plan at any time, but no such action shall reduce the number of Shares subject to the then outstanding Deferred Stock Units granted to any
Participant or adversely to the Participant change the terms and conditions of outstanding Deferred Stock Units without the Participant's consent (or if the Participant is not alive, the consent of
the affected beneficiary of the Participant); provided that adjustments pursuant to Section 6 shall not be subject to the foregoing limitations of this Section 14. Without limitation on
the foregoing, this Plan may be terminated prior to any Grant Date and no Deferred Stock Units shall be granted on such Grant Date or any subsequent Grant Date. 

	15.
	EFFECTIVE DATE 

        The
Plan became effective as of March 28, 2001. 

QuickLinks

Exhibit 10.1

UNITED STATIONERS INC.

Directors Grant Plan (as amended through March 19, 2003)EXHIBIT
10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made effective as of
July 16, 2001 (the “Effective Date”) at Tualatin, Oregon between DIGIMARC
CORPORATION, a Delaware corporation (“Digimarc”) with offices at 19801 SW 72ND
Avenue, Tualatin, OR 97062, and BRUCE DAVIS (“Executive”).

 

WITNESSETH:

 

WHEREAS, Executive is Chief Executive Officer of 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.             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 December 31, 2002, subject to automatic renewal or
early termination as set forth below. 
This Agreement will automatically renew for successive two-year periods
unless terminated by written notice received at least one year prior to any
scheduled termination or expiration of this Agreement.  “Term”, as used herein shall include the
initial term and any such renewals.

 

2.             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 the Company that he will be nominated
to serve on the Board and, as of the date of the next annual meeting of
shareholders, will be nominated to serve as Chairman of the Board in addition to
continuing to serve as Chief Executive Officer.

 

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

 

3.             COMPENSATION AND BENEFITS.

 

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

 

a.             Salary.  Executive will be paid a salary of not less
than $300,000 per year 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. 
Digimarc will review Executive’s salary prior to the end of each
calendar year during the term of the Agreement and adjust the salary as
appropriate in light of Executive’s performance and data and recommendations
from a mutually agreeable compensation consultant regarding compensation of
similarly situated executives.  All
compensation and comparable payments to be paid to Executive under this
Agreement shall be less withholdings required by law.

 

b.             Performance
Bonus.  Digimarc will pay a
performance bonus to Executive within forty five days of the end of each
calendar quarter of up to 50% of Executive’s salary earned during the quarter,
based on the Board’s assessment of Executive’s performance against mutually
agreed upon objectives, which shall be made in the Board’s discretion without
regard to any of Digimarc’s bonus policies which may apply to other employees.
Executive must be employed with Digimarc on the last day of any applicable
calendar quarter in order to receive a bonus for that quarter.

 

c.             Stock options.  Digimarc will grant additional stock options
to Executive consistent with general market practices for similarly situated
executives as determined by periodic market surveys and analyses performed by a
mutually agreeable compensation consultant. 
Such surveys will be conducted not less than once per year.

 

d.             Vacation.  Executive will be entitled to four weeks
vacation per year.

 

2

 

e.             Other
Benefits. Digimarc will provide Executive with the same health,
disability, retirement and death and other fringe benefits as are generally
provided to other executives of the Company. 
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 provided under this
Agreement.

 

4.             TERMINATION.

 

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

 

b.             Digimarc may
terminate Executive’s employment at any time, upon thirty (30) days written
notice to Executive, if Executive becomes permanently disabled.  Digimarc will determine permanent disability
in good faith according to the same standards applicable to other executives of
Digimarc.

 

c.             Digimarc may
terminate Executive’s employment under this Agreement at any time (i)
immediately for “cause” (which will mean for any action or inaction of
Executive which is adverse to Digimarc’s interests, including, without limitation,
Executive’s dishonesty, grossly negligent misconduct, willful misconduct,
disloyalty, act of bad faith, neglect of duty or material breach of this
Agreement or of any Digimarc policy applicable to its Executives generally), or
(ii) without cause upon thirty (30) days written notice to Executive.

 

d.             Executive may
terminate his employment under this Agreement due to “adverse change in
conditions of employment” at any time upon thirty (30) days prior written
notice to Digimarc.  “Adverse change”
shall include any of the following changes, if done without Executive’s prior
written consent:  reduction in title or
responsibilities, or mandatory relocation more than 35 miles from current place
of employment.

 

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

 

5.             EFFECTS OF TERMINATION.

 

a.             If Executive’s
employment is automatically terminated by reason of Executive’s death or
permanent disability or Executive voluntarily terminates his employment (except
for a termination under Section 4(d) above), all Digimarc obligations under
this Agreement will end except for payment of any Compensation payable under
Section 3 for services performed prior to termination and reimbursement of properly
authorized business expenses.

 

b.             If Digimarc
terminates Executive for cause as defined in Section 4(c) above, all of
Digimarc obligations under this Agreement will end except for payment of any 

 

 

 

3

 

 

Compensation payable under Section 3 for services performed prior to
termination and reimbursement of properly authorized business expenses.

 

c.             If Digimarc
terminates Executive without cause or Executive terminates his employment under
Section 4(d) above, all Digimarc obligations under this Agreement will end,
except that Executive’s stock options will immediately and fully vest and
Digimarc will continue to pay Salary and Bonus to Executive and provide
continued benefits (or if unavailable under the general terms and provisions of
the applicable plan, their equivalent) for Executive and his dependents, for
two years from the date of termination, provided, however, that Digimarc shall
have no obligation to make any such payments in the event Executive breaches
Sections 7 or 8 of this Agreement.  The
annualized compensation to be paid will be the sum of Executive’s Salary at the
date of termination plus any Bonus earned in the most recent fiscal year.  The compensation will be paid according to
Digimarc’s standard payroll schedules from the date of termination, as if Davis
had not been terminated.  At the end of
the second year after such a termination, all of Digimarc’s obligations under
this Agreement shall end.

 

6.             EXCISE TAXES

 

a.             In the event that any payment, benefit or distribution
or combination thereof (within the meaning of Section 280G(b)(2) of the
Internal Revenue Code of 1986, as amended (the “Code”)) to Executive or for
Executive’s benefit, paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise in connection with, or arising out
of, Executive’s employment with Digimarc (a “Payment” or “Payments”), would be
subject to the excise tax imposed by Code Section 4999, or any interest or
penalties are incurred by Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the “Excise Tax”), then Executive will be entitled
to receive an additional payment (a “Gross-Up Payment”) in an amount such that
after payment by Executive of all taxes (including any interest or penalties
(other than interest and penalties imposed by reason of Executive’s failure to
file timely a tax return or pay taxes shown due on Executive’s return) imposed
with respect to such taxes and the Excise Tax), including any Excise Tax
imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments.

b.             An initial determination as to whether a Gross-Up
Payment is required pursuant to this Agreement and the amount of such Gross-Up
Payment shall be made by Digimarc. 
Digimarc shall provide its determination (the “Determination”), together
with detailed supporting calculations and documentation, to Executive within
fifteen (15) days of Executive’s termination date, if applicable, or such
other time as requested by Executive (provided Executive reasonably believes
that any of the Payments may be subject to the Excise Tax).  If requested by Executive, Digimarc shall
furnish Executive, at Digimarc’s expense, with an opinion reasonably acceptable
to Executive from Digimarc’s accounting firm (or an accounting firm of
equivalent stature reasonably acceptable to Executive) that there is a reasonable
basis for the Determination.  Any
Gross-Up Payment determined 

4

 

pursuant to this
Section 6(b) shall be paid by Digimarc to Executive within five (5) days
of receipt of the Determination.

c.             As a result of the uncertainty in the application of
Sections 4999 and 280G of the Code, it is possible that a Gross-Up Payment
(or a portion thereof) will be paid which should not have been paid (an “Excess
Payment”) or a Gross-Up Payment (or a portion thereof) which should have been
paid will not have been paid (an “Underpayment”).

                1.             An Underpayment shall be deemed to
have occurred (i) upon notice (formal or informal) to Executive from any
governmental taxing authority that Executive’s tax liability (whether in respect
of Executive’s current taxable year or in respect of any prior taxable year)
may be increased by reason of the imposition of the Excise Tax on a Payment or
Payments with respect to which Digimarc has failed to make a sufficient
Gross-Up Payment, (ii) upon a determination by a court, or (iii) by
reason of determination by Digimarc (which shall include the position taken by
Digimarc, together with its consolidated group, on its federal income tax
return).  If an Underpayment occurs,
Executive shall notify Digimarc in writing of any claim by any government
taxing authority that, if successful, would require the payment by Digimarc of
any Gross-Up Payment or additional Gross-Up Payment.  Such notification shall be given as soon as practicable but no
later than ten (10) business days after Executive is informed in writing of
such claim and shall apprise Digimarc of the nature of such claim and the date
on which such claim is requested to be paid. 
Executive shall not pay such claim prior to the expiration of the thirty
(30) day period following the date on which it gives such notice to Digimarc
(or such shorter period ending on the date that any payment of taxes with
respect to such claim is due).  If
Digimarc notifies Executive in writing prior to the expiration of such period
that it desires to contest such claim, Executive shall (i) give Digimarc any
information reasonably requested by Digimarc relating to such claim, (ii) take
such action in connection with contesting such claim as Digimarc shall reasonably
request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney reasonably
selected by Digimarc, (iii) cooperate with Digimarc in good faith in order to
effectively contest such claim and (iv) permit Digimarc to participate in any
proceedings relating to such claim; provided, however, that
Digimarc shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold Executive harmless, on an after-tax basis, for any
Excise Tax or income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment of costs and
expenses (other than interest and penalties imposed by reason of Executive’s
failure to file timely a tax return or pay taxes shown due on Executive’s
return).  Without limitation on the
foregoing provisions of this Section 6, Digimarc shall control all proceedings
taken in connection with such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and Executive agrees to
prosecute such contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as
Digimarc shall determine; provided, 

 

 

 

5

 

 

 

further, that if Digimarc directs Executive to
pay such claim and sue for a refund, Digimarc shall advance the amount of such
payment to Executive, on an interest-free basis, and shall indemnify and hold
Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such
advance; provided, further, that if Executive is required to
extend the statute of limitations to enable Digimarc to contest such claim,
Executive may limit this extension solely to such contested amount.  Digimarc’s control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and Executive shall be entitled to settle or contest, as the case may
be, any other issue raised by the applicable governmental taxing authority.

 

                2.             An
Excess Payment shall be deemed to have occurred upon a Final Determination (as
hereinafter defined) that the Excise Tax shall not be imposed upon a Payment or
Payments (or portion thereof) with respect to which Executive had previously
received a Gross-Up Payment.  A “Final
Determination” shall be deemed to have occurred when Executive has received
from the applicable government taxing authority a refund of taxes or other
reduction in Executive’s tax liability by reason of the Excess Payment and upon
either (i) the date a determination is made by, or an agreement is entered
into with, the applicable governmental taxing authority which finally and
conclusively binds Executive and such taxing authority, or in the event that a
claim is brought before a court of competent jurisdiction, the date upon which
a final determination has been made by such court and either all appeals have
been taken and finally resolved or the time for all appeals has expired or
(ii) the statute of limitations with respect to Executive’s applicable tax
return has expired.  If an Excess
Payment is determined to have been made, the amount of the Excess Payment shall
be treated as a loan by Digimarc to Executive, which loan Executive must repay
to Digimarc together with interest at the applicable federal rate under Code
Section 7872(f)(2); provided, that no loan shall be deemed to have
been made and no amount will be payable by Executive to Digimarc unless, and
only to the extent that, the deemed loan and payment would either reduce the
amount on which Executive is subject to tax under Code Section 4999 or
generate a refund of tax imposed under Code Section 4999.

d.             Notwithstanding anything contained
in this Agreement to the contrary, in the event that, according to the
Determination, an Excise Tax will be imposed on any Payment or Payments,
Digimarc shall pay to the applicable government taxing authorities, as Excise
Tax withholding, the amount of the Excise Tax that Digimarc has actually
withheld from the Payment or Payments.

7.             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 

 

 

6

 

 

Executive in the course of or incident to his employment, belongs to
Digimarc and shall be returned promptly to Digimarc upon termination 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.             Upon termination 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 7 on Termination Obligations and Section 8 on Proprietary
Information shall survive the termination of the Term and the expiration of
this Agreement.

 

e.             Following any
termination of the Term, 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 years (2) year following any termination 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.

 

 

8.             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 

 

 

7

 

 

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 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 5(c),  Executive shall not, during his term of
employment or for two (2) years following the termination of that employment,
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).  Additionally, Executive
agrees that for a period of two (2) years after termination 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 

 

 

8

 

 

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.  The parties
to this Agreement hereby acknowledge and agree that this Agreement is a
memorialization of Executive’s promotion and intended further promotion to
Chairman of the Board, and that the agreements contained in this Section 8 are
part of the consideration for such advancement in position.

 

g.             Interference
with Business.  In order to
avoid disruption of Digimarc’s business, Executive agrees that for a period of
two (2) years after termination 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).

 

9.             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.

 

10.          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.

 

11.          ENTIRE AGREEMENT.

 

This Agreement, together with any and all other written agreement(s)
made contemporaneously herewith and applicable options and benefits plans of
the company, 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. This Agreement, as
supplemented by such contemporaneous agreement(s), supersedes any prior
employment agreement, written or oral, of Digimarc with respect to Executive.

 

12.          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.

 

 

9

 

 

 

13.          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.

 

14.          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.

 

15.          GOVERNING LAW.

 

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

 

16.          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.

 

17.          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]

 

 

10

 

 

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

Effective Date.

 

 

	
   

  	
   

  	
  DIGIMARC CORPORATION

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BY:

  	
   

  	
  /s/ PHILIP MONEGO

  	
   

  	
  /s/ BRUCE DAVIS

  
	
   

  	
   

  	
  PHILIP MONEGO

  	
   

  	
  BRUCE DAVIS

  
	
   

  	
   

  	
  CHAIRMAN

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

 

 

11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00052-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00052-of-00352.parquet"}]]