Exhibit 10.3

OPTION AGREEMENT

OPTION AGREEMENT (this “Option Agreement”), dated as of October 31, 2013, by and
between ‘mktg, inc.’, a Delaware corporation (the “Company”) and CHARLIE HORSEY
(the “Optionee”).

WHEREAS, the Company and Optionee have entered into an Amended and Restated
Employment Agreement dated as of October 31, 2013 (the “Employment Agreement);

WHEREAS, pursuant to Section 4.7(b) of the Employment Agreement, the Company has
agreed to grant the Optionee an option to purchase 400,000 shares of the
Company’s common stock, $.001 par value per share (“Common Stock”);

WHEREAS, this Option Agreement is being entered into, and the option provided
for herein is being granted, pursuant to Section 4.7(b) of the Employment
Agreement; and

WHEREAS, terms used but not otherwise defined herein shall have the respective
meanings provided for in the Employment Agreement.

NOW, THEREFORE, the parties agree as follows:

1.           Grant of Option.

(a)           Pursuant to the Employment Agreement, and subject to the terms and
conditions set forth herein, the Company hereby grants to the Optionee the right
and option (the “Option”) to purchase all or any part of 400,000 shares (the
“Option Shares”) of Common Stock.

(b)           The Option is not intended to qualify as an incentive stock
option, as defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the “Code”).

2.           Purchase Price.

The purchase price with respect to the Option Shares shall be $2.00 per share.

 

 

3.           Time of Exercise; Term.

(a)          The Option shall become exercisable as to (i) 100,000 Option
Shares, immediately prior to the effectiveness of a Liquidity Event that results
in consideration paid to the Company’s stockholders of at least $2.50 per share
of Common Stock but less than $2.80 per share of Common Stock, (ii) 200,000
Option Shares (in the aggregate), immediately prior to the effectiveness of a
Liquidity Event that results in consideration paid to the Company’s stockholders
of at least $2.80 per share of Common Stock but less than $3.10 per share of
Common Stock, (iii) 300,000 Option Shares (in the aggregate), immediately prior
to the effectiveness of a Liquidity Event that results in consideration paid to
the Company’s stockholders of at least $3.10 per share of Common Stock but less
than $6.00 per share of Common Stock, and (iv) all 400,000 Option Shares,
immediately prior to the effectiveness of a Liquidity Event that results in
consideration paid to the Company’s stockholders of Common Stock if such
Liquidity Event results in consideration paid to the Company’s stockholders of
$6.00 per share or more.

(b)          For purposes of calculating the consideration paid to the Company’s
stockholders per share of Common Stock under subsection (a) above: (i)
appropriate adjustment shall be made for any increase or decrease in the number
of issued shares of Common Stock resulting from a subdivision or consolidation
of shares or other capital adjustment, or the payment of a stock dividend or
other increase or decrease in such shares, effected without receipt of
consideration by the Company, (ii) the value of any shares of marketable
securities received by the Company’s stockholders on a Liquidity Event, shall be
equal to the closing sales price of such shares on the principal stock exchange
on which such shares are listed or traded on the date of such Liquidity Event,
and (iii) the value of any other non-cash consideration received by the
stockholders of the Company shall be determined by the Board of Directors of the
Company (the “Board”) in good faith.

(c)          Subject to the earlier expiration as provided in Section 6 hereof,
the Option shall expire and cease to have any force or effect at 5:00 p.m., New
York City time, on the day immediately preceding the ten-year anniversary of the
Effective Date.

4.           Adjustment Upon Changes in Capitalization.

(a)           The aggregate number of Option Shares and purchase price with
respect thereto shall be appropriately adjusted for any increase or decrease in
the number of issued shares of Common Stock resulting from a subdivision or
consolidation of shares or other capital adjustment, or the payment of a stock
dividend or other increase or decrease in such shares, effected without receipt
of consideration by the Company, or other change in corporate or capital
structure.

(b)           Any adjustment under this Section 4 in the number of Option Shares
shall apply proportionately to only the unexercised portion of the Option. If
fractions of a share would result from any such adjustment, the adjustment shall
be revised to the nearest whole number of shares.

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5.           Method of Exercising Option and Withholding.

(a)           The Option shall be exercised by the delivery by the Optionee to
the Company at its principal office (or at such other address as may be
established by the Company) of written notice of the number of Option Shares
with respect to which the Option is exercised, accompanied by payment in full of
the aggregate purchase price for such Option Shares. Payment for such Option
Shares shall be made (i) in U.S. dollars by personal check, bank draft or money
order payable to the order of the Company, by money transfers or direct account
debits; (ii) through the delivery or deemed delivery based on attestation to the
ownership of shares of Common Stock with a Fair Market Value (as defined in the
Company’s 2010 Equity Incentive Plan (the “2010 Plan”)) on the date of exercise
equal to the total payment due; (iii) pursuant to a broker-assisted “cashless
exercise” program if established by the Company; or (iv) by a combination of the
methods described in (i) through (iii) above.

(b)           The Company’s obligation to deliver shares of Common Stock upon
the exercise of the Option shall be subject to the payment by the Optionee of
any applicable federal, state and local withholding tax. The Company shall, to
the extent permitted by law, have the right to deduct from any payment of any
kind otherwise due to the Optionee any federal, state or local taxes required to
be withheld with respect to such payment. Subject to the right of the Company to
disapprove any such election and require the withholding tax in cash, the
Optionee shall have the right to elect to pay the withholding tax with shares of
Common Stock to be received upon exercise of the Option or which are otherwise
owned by the Optionee, valued at the Fair Market Value thereof on the date of
exercise. Any election to pay withholding taxes with stock shall be irrevocable
once made.

6.           Termination of Employment.

(a)          If the employment of the Optionee with the Company shall be
terminated for Cause, the Option to the extent not theretofore exercised shall
expire forthwith.

(b)          If the Optionee’s employment with the Company shall terminate
because of Optionee’s Disability (as defined in the 2010 Plan), the Option may
be exercised at any time within one year after such termination, subject to the
provisions of subsection (e) of this Section 6. The Option, to the extent
unexercised, shall expire on the date one-year after the Optionee’s employment
with the Company is so terminated.

(c)          If the Optionee’s employment with the Company shall terminate
because of Optionee’s death, the Option may be exercised at any time within 18
months after such termination, subject to the provisions of subsection (e) of
this Section 6. The Option, to the extent unexercised, shall expire on the date
18 months after the Optionee’s death.

(d)          If the Optionee’s employment with the Company shall terminate other
than by reason of death, Disability or for Cause, the Option may be exercised at
any time within three months after such termination, subject to the provisions
of subsection (e) of this Section 6. The Option, to the extent unexercised,
shall expire on the day three months after the termination of the Optionee’s
employment with the Company is so terminated.

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(e)          The Option may not be exercised pursuant to this Section 6 except
to the extent that the Optionee was entitled to exercise the Option at the time
of the termination of his employment, or at the time of his death, provided,
however, that in no event may the Option be exercised later than the termination
date set forth in subsection 3(c).

7.            Change in Control; Corporate Transaction.

(a)           If a Change in Control (as defined in the 2010 Plan) occurs and
Optionee’s employment with the Company has not terminated prior to the effective
time of the Change in Control, then, as of the effective time of such Change in
Control, the vesting and exercisability of all of the Option Shares shall be
accelerated in full.

(b)           If any payment or benefit Optionee would receive pursuant to a
Change in Control from the Company or otherwise (“Payment”) would (i) constitute
a “parachute payment” within the meaning of Section 280G of the Code, and (ii)
but for this sentence, be subject to the excise tax imposed by Section 4999 of
the Code (the “Excise Tax”), then such Payment shall be equal to the Reduced
Amount. The “Reduced Amount” shall be either (x) the largest portion of the
Payment that would result in no portion of the Payment being subject to the
Excise Tax or (y) the largest portion, up to and including the total, of the
Payment, whichever amount, after taking into account all applicable federal,
state and local employment taxes, income taxes, and the Excise Tax (all computed
at the highest applicable marginal rate), results in Optionee’s receipt, on an
after-tax basis, of the greater amount of the Payment notwithstanding that all
or some portion of the Payment may be subject to the Excise Tax. If a reduction
in payments or benefits constituting “parachute payments” is necessary so that
the Payment equals the Reduced Amount, reduction shall occur in the following
order unless Optionee elects in writing a different order (provided, however,
that such election shall be subject to Company approval if made on or after the
effective date of the event that triggers the Payment): reduction of cash
payments; cancellation of accelerated vesting under this Option Agreement;
cancellation of accelerated vesting of “Stock Awards” under the 2010 Plan;
reduction of employee benefits. In the event that acceleration of vesting of
Stock Award compensation is to be reduced, such acceleration of vesting shall be
cancelled in the reverse order of the date of grant of such Stock Awards (i.e.,
earliest granted Stock Award cancelled last) unless cancellation of accelerated
vesting of Stock Awards elects in writing a different order for cancellation.

(c)           The accounting firm engaged by the Company for general audit
purposes as of the day prior to the effective date of the Change in Control
shall perform the foregoing calculations. If the accounting firm so engaged by
the Company is serving as accountant or auditor for the individual, entity or
group effecting the Change in Control, the Company shall appoint a nationally
recognized accounting firm to make the determinations required hereunder. The
Company shall bear all expenses with respect to the determinations by such
accounting firm required to be made hereunder. The accounting firm engaged to
make the determinations hereunder shall provide its calculations, together with
detailed supporting documentation, to Optionee and the Company within fifteen
(15) calendar days after the date on which Optionee’s right to a Payment is
triggered (if requested at that time by Optionee or the Company) or such other
time as requested by Optionee or the Company. If the accounting firm determines
that no Excise Tax is payable with respect to a Payment, either before or after
the application of the Reduced Amount, it shall furnish Optionee and the Company
with an opinion reasonably acceptable to Optionee that no Excise Tax will be
imposed with respect to such Payment. Any good faith determinations of the
accounting firm made hereunder shall be final, binding and conclusive upon
Optionee and the Company.

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(d)           In the event of a Corporate Transaction (as defined in the 2010
Plan), and subject to acceleration under Section 7(a) above, then
notwithstanding any other provision of this Option Agreement, the Board shall
take one or more of the following actions with respect to the Option, contingent
upon the closing or completion of the Corporate Transaction:

(i)          arrange for the surviving corporation or acquiring corporation (or
the surviving or acquiring corporation’s parent company) to assume or continue
the Option or to substitute a similar stock award for the Option (including, but
not limited to, an option to acquire the same consideration paid to the
stockholders of the Company pursuant to the Corporate Transaction);

(ii)          cancel or arrange for the cancellation of the Option, to the
extent not exercised prior to the effective time of the Corporate Transaction,
in exchange for such cash consideration, if any, as the Board, in its sole
discretion, may consider appropriate; and

(iii)          make a payment, in such form as may be determined by the Board,
equal to the excess, if any, of (A) the value of the property the Optionee would
have received upon the exercise of the Option, over (B) any exercise price
payable by Optionee in connection with such exercise.

8.           Transfer and Investment Representation.

(a)           The Option is not transferable otherwise than by will or the laws
of descent and distribution, and the Option may be exercised during the
Optionee’s lifetime only by the Optionee. Any attempt to transfer the Option in
contravention of this subsection (a) is void ab initio. The Option shall not be
subject to execution, attachment or other process.

(b)           The Optionee represents that, unless at the time of exercise of
the Option the Option Shares are registered under the Securities Act of 1933, as
amended (the “Securities Act”) any and all Option Shares purchased hereunder
shall be acquired for investment only and without a view to the resale or
distribution thereof. If the Option Shares are not so registered, certificates
for the Option Shares shall bear a legend reciting the fact that such Option
Shares may only be transferred pursuant to an effective registration statement
under the Securities Act or an opinion of counsel to the Company (or an opinion
of counsel to the Optionee reasonably satisfactory to the Company) that such
registration is not required. The Company may also issue “stop transfer”
instructions with respect to such Option Shares while they are subject to such
restrictions.

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9.             No Rights in Option Shares.

The Optionee shall have none of the rights of a stockholder with respect to the
Option Shares unless and until issued to him upon exercise of the Option.

10.           Governing Law/Jurisdiction.

This Option Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware without reference to principles of conflict of
laws.

11.           Resolution of Disputes.

Any disputes arising under or in connection with this Option Agreement shall be
resolved by binding arbitration in the State of New York in accordance with the
rules and procedures of the American Arbitration Association in the same manner
as provided in Section 9.3 of the Employment Agreement.

12.           Miscellaneous.

This Option Agreement cannot be changed or terminated orally. This Option
Agreement and the Employment Agreement contain the entire agreement between the
parties relating to the subject matter hereof. The paragraph headings herein are
intended for reference only and shall not affect the interpretation hereof. In
case of any conflict between the terms of the Employment Agreement and the terms
of this Option Agreement, the terms of this Option Agreement shall prevail.

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IN WITNESS WHEREOF, the parties have executed this Option Agreement as of the
day and year first above written.

        ‘mktg, inc.’         By:   /s/ Paul Trager   Name: Paul Trager   Title:
Chief Financial Officer         /s/ Charlie Horsey   Charlie Horsey, Optionee

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