Document:

krus-ex1017_356.htm

Exhibit 10.17

KURA SUSHI USA, INC.
2018 INCENTIVE COMPENSATION PLAN
INCENTIVE STOCK OPTION AGREEMENT

THIS INCENTIVE STOCK OPTION AGREEMENT (this “Agreement”) is entered into between KURA SUSHI USA, INC., a Delaware corporation (the “Company”), and __________ (the “Optionee”).  

1.Grant of Option.  The Committee hereby grants, as of [Insert Grant Date] (the “Date of Grant”), to Optionee an option (the “Option”) to purchase up to [Insert Number of Shares] shares (“Shares”) of the Common Stock of the Company, at an exercise price per Share equal to $[Insert Exercise Price] (the “Exercise Price”).  The Option shall be subject to the terms and conditions set forth herein; and the Option is being granted pursuant to the Kura Sushi USA, Inc. 2018 Incentive Compensation Plan, as amended from time to time (the “Plan”), which is incorporated herein for all purposes.  The Option is an Incentive Stock Option and not a Non-Qualified Stock Option except to the extent the requirements of Code Section 422 are not satisfied.  The Optionee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all of the terms and conditions hereof and thereof and all applicable laws and regulations.

2.Definitions.  Unless otherwise provided herein, terms used herein that are defined in the Plan and not defined herein shall have the meanings attributed thereto in the Plan.

3.Vesting and Exercise Schedule.  

(a)Except as otherwise provided in Sections 6 or 9 of this Agreement, or in the Plan, the Option shall vest in installments on such dates as provided below (each, a “Vesting Date”), provided that the Continuous Service of the Optionee continues through and on the applicable Vesting Date:

Percentage of SharesVesting Date

	
 
	

	
[6.25%][On the last day of each calendar quarter over forty-eight months after the Date of Grant]
	
 

Except as otherwise specifically provided herein, there shall be no proportionate or partial vesting in the periods prior to each Vesting Date, and all vesting shall occur only on the appropriate Vesting Date. Upon the termination of the Optionee’s Continuous Service for any reason, any unvested portion of the Option shall terminate and be null and void.

(b)Notwithstanding anything to the contrary herein or in the Plan, in no event shall any portion of the Option be exercisable later than the tenth (10th) anniversary of the Date of Grant.

4.Method of Exercise.  The vested portion of this Option shall be exercisable in whole or in part in accordance with the vesting and exercise provisions set forth in Section 3 hereof by written notice which shall state the election to exercise the Option, the number of Shares in respect of which the Option is being exercised, and such other representations and agreements as to the holder’s investment intent with respect to such Shares as may be required by the Company pursuant to the provisions of the Plan.  Such written notice shall be signed by the Optionee and shall be delivered in person or by certified mail to the Secretary of the Company.  The written notice shall be accompanied by payment of the Exercise Price.  This Option shall be deemed to be exercised after both (a) receipt by the Company of such written notice accompanied by the Exercise Price and (b) arrangements that are satisfactory to the Committee in its sole discretion have been made for Optionee’s payment to the Company of the amount, if any, that is necessary to be withheld in accordance with applicable Federal or state withholding requirements.  No Shares shall be issued pursuant to the Option unless and until such issuance and such exercise shall comply with all relevant provisions of applicable law, including the requirements of any stock exchange upon which the Shares then may be traded.

5.Method of Payment.  Payment of the Exercise Price shall be by any of the following, or a combination thereof, at the election of the Optionee:  (a) cash; (b) check; or (c) pursuant to a “cashless exercise” procedure, by delivery of a properly executed exercise notice together with such other documentation, and subject to such guidelines, as the Committee shall require to effect an exercise of the Option and delivery to the Company by a licensed broker acceptable to the Company of proceeds from the sale of Shares sufficient to pay the Exercise Price and any applicable income or employment taxes; (d) to the extent permitted by the Committee, with Shares owned by the Optionee, or the withholding of Shares that otherwise would be delivered to the Optionee as a result of the exercise of the Option; or (e) such other consideration or in such other manner as may be determined by the Committee in its absolute discretion.

6.Termination of Option.

(a)General.  Any unexercised portion of the Option shall automatically and without notice terminate and become null and void at the time of the earliest to occur of the following:

	
 
	
(i)
	
three (3) months after the date on which the Optionee’s Continuous Service is terminated other than by reason of (A) by the Company or a Related Entity for Cause, (B) a Disability of the Optionee as determined by a medical doctor satisfactory to the Committee, or (C) the death of the Optionee;

	
 
	
(ii)
	
immediately upon the termination of the Optionee’s Continuous Service by the Company or a Related Entity for Cause;

	
 
	
(iii)
	
twelve (12) months after the date on which the Optionee’s Continuous Service is terminated by reason of a Disability as determined by a medical doctor satisfactory to the Committee;

	
 
	
(iv)
	
twelve (12) months after the date of termination of the Optionee’s Continuous Service by reason of the death of the Optionee;

	
 
	
(v)
	
tenth (10th) anniversary of the Date of Grant.

(b)Cancellation.  To the extent not previously exercised, (i) the Option shall terminate immediately in the event of (A) the liquidation or dissolution of the Company, or (B) any reorganization, merger, consolidation or other form of corporate transaction in which the Company does not survive or the Shares are exchanged for or converted into securities issued by another entity, or an affiliate of such successor or acquiring entity, unless the successor or acquiring entity, or an affiliate thereof, assumes the Option or substitutes an equivalent option or right pursuant to Section 9(c) of the Plan, and (ii) the Committee in its sole discretion may by written notice (“cancellation notice”) cancel, effective upon the consummation of any transaction that constitutes a Change in Control, the Option (or portion thereof) that remains unexercised on such date.  Except in the event that the Board or the Committee determines to cancel and cash out the Options in connection with a Change in Control, the Committee shall give written notice of any proposed transaction referred to in this Section 6(b) a reasonable period of time prior to the closing date for such transaction (which notice may be given either before or after approval of such transaction), in order that the Optionee may have a reasonable period of time prior to the closing date of such transaction within which to exercise the Option if and to the extent that it then is exercisable (including any portion of the Option that may become exercisable upon the closing date of such transaction).  The Optionee may condition his exercise of the Option upon the consummation of a transaction referred to in this Section 6(b).

7.Transferability.  Unless otherwise determined by the Committee, the Option granted hereby is not transferable otherwise than by will or under the applicable laws of descent and distribution, and during the lifetime of the Optionee the Option shall be exercisable only by the Optionee, or the Optionee’s guardian or legal representative. In addition, the Option shall not be assigned, negotiated, pledged or hypothecated in any way (whether by operation of law or otherwise), and the Option shall not be subject to execution, attachment or similar process. Upon any attempt to transfer, assign, negotiate, pledge or hypothecate the Option, or in the event of any levy upon the Option by reason of any execution, attachment or similar process contrary to the provisions hereof, the Option shall immediately become null and void.  The terms of this Option shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee.

8.No Rights of Stockholders.  Neither the Optionee nor any personal representative (or beneficiary) shall be, or shall have any of the rights and privileges of, a stockholder of the Company with respect to any Shares purchasable or issuable upon the exercise of the Option, in whole or in part, prior to the date on which the Shares are issued.

9.Acceleration of Exercisability of Option.

(a)Acceleration Upon Certain Terminations or Cancellations of Option.  This Option shall become immediately fully exercisable in the event that, prior to the termination of the Option pursuant to Section 6 hereof, (i) the Option is terminated pursuant to Section 6(b)(i) hereof, or (ii) the Company exercises its discretion to provide a cancellation notice with respect to the Option pursuant to Section 6(b)(ii) hereof.

(b)Acceleration Upon Change in Control.  This Option shall become immediately fully exercisable in the event that, prior to the termination of the Option pursuant to Section 6 hereof, and during the Optionee’s Continuous Service, there is a “Change in Control”, as defined in Section 8(b) of the Plan.

10.No Right to Continued Employment.  Neither the Option nor this Agreement shall confer upon the Optionee any right to continued employment or service with the Company.

11.Law Governing.  This Agreement shall be governed in accordance with and governed by the internal laws of the State of Delaware.

12.Interpretation / Provisions of Plan Control.  This Agreement is subject to all the terms, conditions and provisions of the Plan, including, without limitation, the amendment provisions thereof, and to such rules, regulations and interpretations relating to the Plan adopted by the Committee as may be in effect from time to time.  If and to the extent that this Agreement conflicts or is inconsistent with the terms, conditions and provisions of the Plan, the Plan shall control, and this Agreement shall be deemed to be modified accordingly.  The Optionee accepts the Option subject to all of the terms and provisions of the Plan and this Agreement.

13.Notices.  Any notice under this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally or when deposited in the United States mail, registered, postage prepaid, and addressed, in the case of the Company, to the Company’s Secretary at 17932 Sky Park Circle, Suite H, Irvine, CA 92614, or if the Company should move its principal office, to such principal office, and, in the case of the Optionee, to the Optionee’s last permanent address as shown on the Company’s records, subject to the right of either party to designate some other address at any time hereafter in a notice satisfying the requirements of this Section.

14.Incentive Stock Option Treatment.  The terms of this Option shall be interpreted in a manner consistent with the intent of the Company and the Optionee that the Option qualifies as an Incentive Stock Option under Section 422 of the Code.  If any provision of the Plan or this Agreement shall be impermissible in order for the Option to qualify as an Incentive Stock Option, then the Option shall be construed and enforced as if such provision had never been included in the Plan or the Option.  If and to the extent that the number of Options granted pursuant to this Agreement exceeds the limitations contained in Section 422 of the Code on the value of Shares with respect to which this Option may qualify as an Incentive Stock Option, this Option shall be a Non-Qualified Stock Option.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the _______ day of  _________________, 20___.

COMPANY:

KURA SUSHI USA, INC.

By:

Name: ____________________________________

Title: _____________________________________

 

The Optionee acknowledges receipt of a copy of the Plan and represents that he or she has reviewed the provisions of the Plan and this Option Agreement in their entirety, is familiar with and understands their terms and provisions, and hereby accepts this Option subject to all of the terms and provisions of the Plan and the Option Agreement.  The Optionee further represents that he or she has had an opportunity to obtain the advice of counsel prior to executing this Option Agreement.

Dated:OPTIONEE:

By:

[Insert Name of U.S. Employee]krus-ex1018_355.htm

Exhibit 10.18

KURA SUSHI USA, INC.

2018 INCENTIVE COMPENSATION PLAN

NONQUALIFIED STOCK OPTION AGREEMENT

 

 

THIS NONQUALIFIED STOCK OPTION AGREEMENT (this “Agreement”) dated ________________, 20__, is entered into between KURA SUSHI USA, INC., a Delaware corporation (the “Company”), and __________ (the “Optionee”).  

1.Grant of Option; Vesting.

(a)Subject to the terms and conditions of this Agreement and the Kura Sushi USA, Inc. 2018 Incentive Compensation Plan, as amended from time to time (the “Plan”), the Company hereby grants to the Optionee the right and option (this “Option”) to purchase all or any part of an aggregate of _________________________ (____) shares (the “Shares”) of the Common Stock of the Company at a price per share of $_________________, which is not less than one hundred percent (100%) of the Fair Market Value of a Share of the Common Stock of the Company on the date the Option is granted (the “Exercise Price”).  In the case of any stock split, stock dividend, or like change in the Shares occurring after the date hereof, the number of Shares and the Exercise Price shall be adjusted as set forth in Section 9(c) of the Plan.

(b)Subject to the terms of this Agreement, this Option shall vest and become exercisable in [________________ equal installments on each of _____________, 20___, _________________, 20___, _____________, 20___, [and] _____________, 20___ [and _____________, 20___] [upon the date of grant]. 

(c)Except as provided in Section 2 of this Agreement, if the Optionee’s Continuous Service terminates for any reason, this Option, to the extent not then vested, shall immediately terminate without consideration.

2.Term.  This Option shall terminate on _____________, 20__, which shall not exceed ten (10) years from the date of grant (the “Option Expiration Date”); provided that if the Optionee’s Continuous Service is terminated due to the Optionee’s retirement, death or Disability, or by the Company without Cause, the Optionee may exercise, in whole or in part, the vested portion of this Option until the earlier of (i) ninety (90) days following the date of such termination or twelve (12) calendar months following termination due to Disability or death (at which time the Option shall be automatically cancelled) and (ii) the Option Expiration Date.

3.Exercise.  Subject to Sections 1 and 2 of this Agreement and the terms of the Plan, this Option may be exercised, in whole or in part.  

4.Nontransferable.  This Option may not be transferred, assigned, pledged or hypothecated in any manner (whether by operation of law or otherwise) other than by will or by the applicable laws of descent and distribution, and shall not be subject to execution, attachment, or similar process.  Any attempt to transfer, assign, pledge, hypothecate, or otherwise dispose of the Option or of any right or privilege conferred hereby shall be null and void.

5.Withholding.  Prior to delivery of the Shares purchased upon exercise of this Option, the Company shall determine the amount of any United States federal, state, and local income tax, if any, which is required to be withheld under applicable law and shall, as a condition of exercise of this Option and delivery of certificates or registration in book-entry form representing the Shares purchased upon exercise of this Option, collect from the Optionee the amount of any such tax to the extent not previously withheld.  The Optionee may satisfy the Optionee’s withholding obligations in the manner contemplated by Section 9(e) of the Plan.

6.Right of the Optionee.  Neither this Option, the execution of this Agreement, nor the exercise of any portion of this Option shall confer upon the Optionee any right to, or guarantee of, continued service by the Company, or in any way limit the right of the Company or a Related Entity to terminate the service of the Optionee at any time, subject to the terms of any written service or similar agreement between the Company or a Related Entity and the Optionee.

7.Professional Advice.  The acceptance and exercise of this Option may have consequences under federal and state tax and securities laws that may vary depending upon the individual circumstances of the Optionee.  Accordingly, the Optionee acknowledges that the Optionee has been advised to consult his personal legal and tax advisor in connection with this Agreement and this Option.

8.Agreement Subject to the Plan.  The Option and this Agreement are subject to the terms and conditions set forth in the Plan, which terms and conditions are incorporated herein by reference.  If and to the extent that this Agreement conflicts or is inconsistent with the terms, conditions and provisions of the Plan, the Plan shall control, and this Agreement shall be deemed to be modified accordingly.  Capitalized terms used herein but not defined shall have the meanings set forth in the Plan. The Optionee acknowledges that a copy of the Plan previously has been delivered to the Optionee. This Agreement and the Plan constitute the entire understanding between the Company and the Optionee with respect to this Option.

9.Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware without regard to conflict of laws principles, and shall bind and inure to the benefit of the heirs, executors, personal representatives, successors, and assigns of the parties hereto.

10.Notices.  Any notice under this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally or when deposited in the United States mail, registered, postage prepaid, and addressed, in the case of the Company, to the Company’s Secretary at 17932 Sky Park Circle, Suite H, Irvine, CA 92614, or if the Company should move its principal office, to such principal office, and, in the case of the Optionee, to the Optionee’s last permanent address as shown on the Company’s records, subject to the right of either party to designate some other address at any time hereafter in a notice satisfying the requirements of this Section.

11.Binding Effect.  This Agreement has been duly executed and delivered by the Company and constitutes the legal, valid, and binding obligations of the Company enforceable against the Company in accordance with its terms.

12.Amendment.  The rights of the Optionee hereunder may not be impaired by any amendment, alteration, suspension, discontinuance, or termination of the Plan or this Agreement without the Optionee’s consent.

 

[Signature page to follow.]

 

 

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

 

 

		
	
COMPANY:   
	
KURA SUSHI USA, INC. 

 

By:

Name:  

Title:  

	
 
	
 

	
OPTIONEE:  
	
Signature:  

 

Printed Name:  ___________________________

 

Address: ________________________________

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