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Benihana Inc

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Benihana Inc BENIHANA INC. CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS (Revised as of August 24, 2007) The Board of Directors (the “Board”) of Benihana, Inc. (the “Company”) shall appoint the Audit Committee (the “Committee”) which shall be constituted and have the responsibility and authorityas described herein. A. PURPOSE The primary function of the Committee is to represent the Board in fulfilling its oversight responsibilities by: 1. Reviewing the financial reports and other financial and related information released by the Company to the public, or in certain circumstances governmental bodies; 2. Reviewing the Company’s system of internal controls regarding finance, accounting, business conduct and ethics and legal compliance that management and the Board have established; 3. Reviewing the Company’s accounting and financial reporting processes; 4. Reviewing and appraising with management the performance of the Company’s independent auditors, including the audit of the Company’s financial statements; 5. Monitoring the independence of the Company’s independent auditors; 6. Providing an open avenue of communication between the independent auditors, management and the Board of Directors; and 7. Receiving and investigating notices of financial improprieties. While the Committee has the responsibilities and powers set forth in this Charter, Committee members are not professional accountants or auditors and their functions are not intended to duplicate or to certify the activities of management and the independent auditor. The Company’s management is responsible for the preparation of the Company’s financial statements, for maintaining appropriate systems for accounting and internal controls, and for monitoring compliance with the Company’s 1 177914 policies and rules regarding business conduct. The Company’s independent auditors are responsible for planning and conducting proper audits and reviews of the Company’s financial statements. Ensuring that the Company’s financial statements comply with generally accepted accounting principles is the joint responsibility of the Company’s management and the independent auditors. The Committee has the authority to conduct any investigation appropriate to fulfilling its responsibilities, and it has direct access to the independent auditors as well as anyone in the organization. The Committee has the ability to retain, at the Company’s expense, special legal, accounting or other consultants or experts it deems necessary in the performance of its duties. The Company shall provide funding for the ordinary administrative expenses of the Committee. B. COMPOSITION The Committee shall be comprised of three or more directors, as determined by the Board, each of whom shall be independent directors and free from any relationship that, in the opinion of the Board, would interfere with the exercise of his or her independent judgment as a member of the Committee. Each Committee member shall meet the requirements of the NASDAQ Stock Market, Inc. Marketplace Rules and the Securities Exchange Act of 1934 (the “Exchange Act”). A Committee member may not be an affiliated person of the Company or any of its subsidiaries. All members of the Committee shall have a working familiarity with basic finance and accounting practices and be able to read and understand fundamental financial statements, including the Company’s financial statements. At least one member of the Committee shall, in the judgment of the Board, have past employment experience in finance or accounting, requisite professionalcertification in accounting, or any other comparable experience or background that results in the individual’s financial sophistication (as required by applicable listing standards), including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities. The members of the Committee shall be appointed and may be replaced by the Board. If an Audit Committee Chair is not designated or present, the members of the Committee may designate a Chair by majority vote of the Committee membership. C. MEETINGS The Committee will meet at least four times annually and be available to meet more frequently as circumstances dictate. The Committee Chairperson shall meet with the independent auditors and senior management periodically to review the Company’s financialstatements, 10-Q reports and other relevant interim reports before release and/or filing. Incidental to any of these regularly scheduled meetings, theCommittee shall meet in separate executive sessions with management, the chiefinternal audit executive (the “Chief Audit Executive”) and the independent auditors, and have direct and independent interaction with such persons to discuss any matters that the Committeeand anyofthese persons or groups believe should be discussed privately. 2 177914 D. COMPENSATION The members of the Committee shall be compensated for participation at Committee meetings as provided by the Board, and shall be reimbursed for expenses incurred in connection with their service on the Committee. No additional fees (other than for service as a director), including consulting and advisory fees, may be paid to members of the Committee which are proscribed by the Exchange Act. E. RESPONSIBILITIES AND DUTIES To fulfill its responsibilities and duties the Committee shall: Financial Statement and Disclosure Review 1. Review the Company’s annual financial statements and other reports, including the Management’s Discussion and Analysis contained in these reports, and financial and related information prior to its release to the public, or in certain circumstances release to governmental bodies, including any certification, report, opinion or review rendered by the independent auditors. 2. Review with financial management and the independent auditors each quarterly earnings release and 10-Q Quarterly Report, including the Management’s Discussion and Analysis contained in such reports, prior to its filing. The Chairperson of the Committee may represent the entire Committee for purposes of this review. 3. Review with independent auditors the recommendations included in their management letter, if any, and their informal observations regarding the adequacy of overall financial and accounting procedures of the Company. On the basis of this review, make recommendations to senior management for any changes that seemappropriate. 4. Annually prepare a report to shareholders as required by the SEC. The report should be included in the Company’s annual proxy statement. Financial Reporting Process 5. In consultation with the independent auditors, review the integrity of the Company’s financial reporting process, both internal and external. 6. Discuss with the independent auditors the matters required to be communicated under Statement on Auditing Standards No. 61, Communication with Audit Committees (SAS 61), as may be modified or supplemented, including the independent auditors’ judgment as to the quality of the Company’s accounting principles, setting forth 3 177914 significant financial reporting issues, judgments and disclosures in financialstatements. 7. Review and consider major changes to the Company’s accounting principles and practices as proposed by management or the independent auditors. 8. The Chairperson of the Committee may represent the entire Committee for purposes of the consultation and review prescribed under this section (Financial Reporting Process). Financial Reporting Process Improvement 9. Request that management report to the Committee and the independent auditors regarding any principal/critical risks, emerging or developing issues and significant judgments made or to be made in management’s preparation of the financial statements. 10. Following completion of the annual audit, review separatelywith management and the independent auditors any significant difficulties encountered during the course of the audit, including any restrictions on the scope of work or access to required information. 11. Review any significant disagreement among management and the independent auditors in connection with the preparation of the financial statements. In cases where any such disagreement cannot be resolved to the mutual satisfaction of management and the outside auditors, the Committee shall have responsibility for making the final determination of the Company’s position. 12. Review with the independent auditors and management the extent to which changes or improvements in financial or accounting practices, as approved by the Committee, have been implemented. Critical Accounting Policies and Significant Accounting Judgments and Estimates 13. Request and review report from independent auditors on critical accounting policies and alternative treatments of financial information that have been discussed with management. Members of the Committee should understand the Company’s critical accounting policies, internal controls, off-balance sheet financing and related party transactions. 14. Review major issues regarding accounting principles and financial statement presentations, including any significant changes in the Company’s selection or application of accounting principles. 15. Discuss with senior management, with respect to each critical accounting estimate included in the Company’s management, disclosure and analysis (MD&A) associated 4 177914 with its financials, the development and selection of the accounting estimate, and the MD&A disclosure about the estimate. 16. Discuss with
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