In June 2008, the Board of Directors authorized 2,500 shares of preferred stock, par value $0.001 per share. The Board of Directors has the authority to issue the undesignated preferred stock in one or more series and to determine the powers, preferences and rights and the qualifications, limitations or restrictions granted to or imposed upon any wholly unissued series of undesignated preferred stock and to fix the number of shares constituting any series and the designation of such series, without any further vote or action by the shareholders. The issuance of preferred stock may have the effect of delaying, deferring or preventing a change of control of the Company without further action by shareholders and may adversely affect the voting and other rights of the holders of common stock.

The Board of Directors authorized 10 shares of Series A Redeemable Nonvoting Preferred stock (“Series A Preferred”) that were issued to certain executive officers at the time of formation. The Series A Preferred has no voting rights, except as required by law, and may be redeemed at the option of the Company’s Board of Directors at any time.

The Series A Preferred is redeemable based on the stated fair value of $5.00 per share. The Series A Preferred has no dividend rights and no rights to the undistributed earnings of the Company.

In June 2008, the Board of Directors authorized 50,000 shares of common stock, par value $0.001 per share. The holders of Digimarc common stock are entitled to one vote for each share held of record on all matters submitted to a vote of its shareholders, including the election of directors. Subject to preferences that may be granted to any then outstanding preferred stock, holders of common stock are entitled to receive ratably those dividends as may be declared by the Board of Directors out of funds legally available for such purpose, as well as any distributions to the Company’s shareholders. In the event of the Company’s liquidation, dissolution or winding up, holders of common stock are entitled to share ratably in all of the Company’s assets remaining after payment of liabilities and the liquidation preference of any then outstanding preferred stock. Holders of common stock have no preemptive or other subscription or conversion rights. There are no redemption or sinking fund provisions applicable to the common stock. All outstanding shares of common stock are fully paid and non-assessable.

In June 2017, the Company sold 500 shares of its common stock in a registered direct offering to a certain investor at a price of $35.55 per share. The offering was made without an underwriter or placement agent. The Company received $17,775 of cash proceeds from the offering, and paid $77 in stock issuance costs.

In November 2017, the Company sold 331 shares of its common stock in a registered direct offering to a certain investor at a price of $36.25 per share. The offering was made without an underwriter or placement agent. The Company received $12,000 of cash proceeds from the offering, and paid $21 in stock issuance costs.

In March 2018, the Company’s Board of Directors approved the 2018 Incentive Plan (2018 Plan) which was later approved by the Company’s shareholders at the Company’s 2018 Annual Meeting of Shareholders in April 2018. The 2018 Plan replaced the 2008 Incentive Plan (2008 Plan). The 2018 Plan provides for the grant of incentive and non-qualified stock options, stock appreciation rights, stock awards, restricted stock awards, restricted stock units, performance shares, performance units, and other stock or cash-based awards, which may be granted to officers, directors, employees, consultants, agents, advisors and independent contractors who provide services to the Company and its affiliated companies.

The 2018 Plan authorizes the issuance of 1,000 shares of common stock. In addition, up to 770 shares of common stock subject to awards outstanding under the 2008 Plan became available for issuance under 2018 Plan to the extent that those shares cease to be subject to the awards (as a result of, for example, expiration, cancellation or forfeiture of the award). The shares authorized under the 2018 Plan are subject to adjustment in the event of a stock split, stock dividend, recapitalization or similar event. Shares issued under the 2018 Plan will consist of authorized and unissued shares or shares held by the Company as treasury shares. If an award granted under the 2018 Plan lapses, expires, terminates or is forfeited or surrendered without having been fully exercised or without the issuance of all the shares subject to the award, the shares covered by that award will again be available for issuance under the 2018 Plan. Shares that are (i) tendered by a participant or retained by the Company as payment for the purchase price of an award or to satisfy tax withholding obligations or (ii) covered by an award that is settled in cash, or in some manner that some or all of the shares covered by the award are not issued, will again be available for issuance under the 2018 Plan. In addition, awards granted as substitute awards in connection with acquisition transactions will not reduce the number of shares authorized for issuance under the 2018 Plan.

As of December 31, 2018, under all of the Company’s stock-based compensation plans, equity awards to purchase an additional 1,628 shares were authorized for future grants under the 2018 Plan.

Options granted, exercised and forfeited under the stock incentive plan are summarized as follows:

				Weighted		Weighted
				Average		Average		Aggregate
				Exercise		Grant Date		Intrinsic
	Options			Price		Fair Value		Value
Options outstanding, December 31, 2016		421		$	19.06	$	9.01
Granted		200		$	30.50	$	14.58
Exercised		(106	)	$	11.17	$	6.75
Forfeited or expired		—			—		—
Options outstanding, December 31, 2017		515		$	25.13	$	11.64
Granted		100		$	29.55	$	14.46
Exercised		(102	)	$	12.38	$	7.02
Forfeited or expired		—			—		—
Options outstanding, December 31, 2018		513		$	28.52	$	13.10	$	46
Options exercisable, December 31, 2018		305		$	27.46			$	46
Options unvested, December 31, 2018		208		$	30.08			$	-

The aggregate intrinsic value is based on the closing price of $14.50 per share of Digimarc common stock on December 31, 2018, which would have been received by the optionees had all of the options with exercise prices less than $14.50 per share been exercised on that date.

The following table summarizes information about stock options outstanding at December 31, 2018:

	Options Outstanding						Options Exercisable
					Weighted						Weighted
			Remaining		Average				Remaining		Average
	Number		Contractual		Exercise		Number		Contractual		Exercise
Exercise Price	Outstanding		Life (Years)		Price		Outstanding		Life (Years)		Price
$9.91		10		0.33	$	9.91		10		0.33	$	9.91
$14.99 - $18.01		28		1.18	$	16.61		28		1.18	$	16.61
$27.61 - $29.55		200		6.26	$	28.58		108		3.37	$	27.76
$30.01 - $30.50		275		6.86	$	30.37		159		5.52	$	30.27
$9.91 - $30.50		513		6.19	$	28.52		305		4.19	$	27.46

The Compensation Committee of the Board of Directors has awarded shares of restricted stock under the Company’s 2018 Plan to employees and directors. The shares subject to the restricted stock awards vest over a certain period, usually four years, following the date of the grant. Specific terms of the restricted stock awards are governed by Restricted Stock Agreements between the Company and the award recipients.

				Weighted
				Average
	Number of			Grant Date
	Shares			Fair Value
Unvested balance, December 31, 2016		385		$	26.28
Granted		317		$	27.56
Vested		(250	)	$	24.05
Forfeited		(26	)	$	27.79
Unvested balance, December 31, 2017		426		$	28.44
Granted		239		$	29.73
Vested		(215	)	$	28.96
Forfeited		(24	)	$	29.29
Unvested balance, December 31, 2018		426		$	28.85

The following table indicates the fair value of all restricted stock awards that vested during the years ended December 31, 2018 and 2017, respectively: