Code:

<?php
Header("Content-type: image/jpeg");
$orig_image = imagecreatefromjpeg($slika);
list($width, $height, $type, $attr) = getimagesize($slika);
if ($width > 100) {
$ratio = 100 / $width;
$newheight = $ratio * $height; }
else $newheight = $height;

$sm_image = imagecreatetruecolor(100,$newheight) or die ("Cannot Initialize new GD image stream");;

Imagecopyresampled($sm_image,$orig_image,0,0,0,0,100,$newheight,imagesx($orig_image),imagesy($orig_image));
imageJPEG($sm_image);
$watermark = imagecreatefrompng('watermark.png');  
$watermark_width = imagesx($watermark);  
$watermark_height = imagesy($watermark);  
$image = imagecreatetruecolor($watermark_width, $watermark_height); 
$image = imagecreatefromjpeg($sm_image);  
$size = getimagesize($sm_image);  
$dest_x = $size[0] - $watermark_width - 5;  
$dest_y = $size[1] - $watermark_height - 5;  
imagecopyresampled($image, $watermark, $dest_x, $dest_y, 0, 0, $watermark_width, $watermark_height, $watermark_width, $watermark_height);
//imagecopyresampled($image, $watermark, $dest_x, $dest_y, 0, 0, $watermark_width, $watermark_height, 100);  
imagejpeg($image);  
imagedestroy($image);  
imagedestroy($watermark); 
?>