Summary of Non-Employee Director Compensation Arrangements for Digimarc Corporation
This document outlines the compensation for non-employee directors of Digimarc Corporation. Non-employee directors receive annual cash retainers, additional fees for committee roles, and equity awards in the form of stock options and restricted stock. Initial option grants vest over three years, while annual grants vest over one year. Directors are also reimbursed for reasonable business expenses. The Board may choose not to grant certain equity awards in any given year. Directors who are also employees do not receive additional compensation for board service.
Summary of Key Terms of Non-Employee Director Compensation Arrangements
Directors who are also employees of Digimarc receive no additional compensation for their services as directors. Directors who are not employees of Digimarc receive cash compensation and equity compensation as described below. All directors are also reimbursed for reasonable and necessary travel, communications, and other out-of-pocket business expenses incurred in connection with their attendance at meetings, while on corporate business or for continuing education related to their board service.
| Annual Cash Retainer |
| $30,000 |
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| Additional Annual Cash Retainers for: |
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| Lead Director |
| $30,000 |
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| Audit Committee Chair |
| $20,000 |
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| Audit Committee Member |
| $10,000 |
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| Compensation Committee Chair |
| $10,000 |
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| Compensation Committee Member |
| $5,000 |
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| Other Standing Committee Chair |
| $7,500 |
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| Other Standing Committee Member |
| $3,750 |
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| Additional fee for excess meetings * |
| $1,000 for in-person attendance/ |
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| Initial Option Grant |
| 20,000 shares |
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| Annual Option Grant (Continuing Director) |
| 6,000 shares |
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| Annual restricted Stock Grant (Continuing Director) |
| 3,000 shares |
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| Annual Standing Committee Member Option Grant ** |
| 3,000 shares |
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* In excess of eight meetings per year.
** In 2006 the Board elected not to grant these awards.
All options are granted with an exercise price equal to the fair market value of our stock on the grant date. Initial option grants vest and become exercisable in 36 equal installments on each monthly anniversary of the grant date, such that the stock option will be fully exercisable three years after the grant date. Annual option grants to continuing directors, including annual option grants to standing committee members, are made immediately following each annual meeting of shareholders and vest and become exercisable in twelve equal installments on each monthly anniversary of the grant date, such that the stock option will be fully exercisable one year after the grant date.
The restricted stock awards are subject to a forfeiture restriction that lapses as to 100% of the shares subject to the award one year after the grant date.
The Board of Directors has discretion to elect not to make the annual option and restricted stock grants to continuing directors and standing committee members. In 2006, the Board elected not to make the annual 3,000 share grant to directors for service on one or more committees.
