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Exhibit 10.4
 
EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”) is entered into this 22nd day of
August, 2011 (the “Effective Date”), by and between Benihana Inc., a Delaware
corporation with its principal corporate office located at 8685 Northwest 53rd
Terrace, Miami, Florida  33166 (the “Company”), and David Flanery (the
“Executive”).

RECITALS

WHEREAS, the Company desires to employ the Executive as of the Effective Date on
the terms and conditions set forth in this Agreement, and the Executive desires
to be so employed
.
 
 
NOW, THEREFORE, in consideration of the premises and of the mutual promises,
representations and covenants herein contained, the Company and the Executive
hereby agree as follows:
 
AGREEMENT

1.             Scope of Employment.  The Company agrees to employ the Executive,
and the Executive agrees to be employed by the Company, as Chief Financial
Officer of the Company.  The Executive shall have the responsibilities and
authority of such position as set forth in the Company’s by-laws and such other
responsibilities commensurate with the Executive's title and position as may be
reasonably determined and assigned to the Executive by the Board of Directors of
the Company (the “Board”).  The Executive shall devote his full business time,
attention and energies to Company affairs.
 
2.             Term.  The Executive’s employment under this Agreement shall
commence on the Effective Date and shall continue until terminated by either
party as provided in this Agreement.
 
3.             Compensation.
 
(a)  Base Salary.  The Company agrees to pay the Executive, and the Executive
agrees to accept, in payment for services to be rendered by the Executive
hereunder, a base salary of $300,000.00 per annum (the “Base Salary”).  The Base
Salary shall be paid in approximately equal installments, less such sums as may
be required to be deducted or withheld under the provisions of federal, state or
local law, in accordance with the Company’s customary payroll practices.  The
Board will review the Executive's performance and Base Salary annually, with the
understanding that said review may result in an additional increase in Base
Salary but in no circumstances shall it result in a decrease in Base
Salary.  For all purposes under this Agreement, the term “Base Salary” shall
refer to the Executive’s base salary under this Section 3(a).
 
 
 

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(b)  Annual Bonus.  In addition to the Base Salary, the Executive also shall be
eligible to receive an annual cash bonus (the “Bonus”) of up to 50% of his Base
Salary, the amount and payment of which shall be based on the Company’s
attainment of financial and other targets established at or near the beginning
of each annual bonus period in good faith by the Company in writing after
consultation with the Executive (which amount shall be pro-rated for the 2012
fiscal year based on the number of completed months worked during such fiscal
year).  Any such bonus will be paid to the Executive in a lump sum, reduced by
appropriate withholding tax and other deductions required by applicable law,
after the Company determines whether and to what extent the targets have been
attained and, in any event, no later than the 15th day of the third month after
the end of the Company’s fiscal year to which the bonus relates.
 
(c)  Equity Compensation.  The Company will issue to the Executive a Restricted
Stock Grant under the Company’s 2007 Equity Incentive Plan (the “Plan”) with
respect to a total of 150,000 shares of the Company’s Common Stock, subject to
the terms and conditions of the Plan and a Restricted Stock Agreement in the
form attached hereto as EXHIBIT A (“Restricted Stock Agreement”), reflecting the
grant of Restricted Stock under the Plan.
 
(d)  Sale of Company Incentive Compensation.  If the Executive remains a full
time employee of the Company from the date hereof until the occurrence of a Sale
of the Company, as defined below, or if a Sale of the Company occurs within six
(6) months of the termination of the Executive’s employment either by the
Company without Cause or by the Executive for Good Reason, the Executive shall
be entitled to a lump sum payment immediately following the Sale of the Company,
and in any event within five (5) days after such Sale, in an amount determined
pursuant to the following table:
 
Share price of Common Stock in
Sale of the Company
 
Percentage of Base Salary Due to the
Executive
$15 or more
 
150%
$13 or more, but less than $15
 
100%
$10 or more, but less than $13
 
75%
Less than $10
 
25%

 
(e)  Sale of the Company.  For purposes of this Agreement, a “Sale of the
Company” shall have the meaning set forth in the Restricted Stock Agreement,
which definition is incorporated by reference in this Agreement.
 
4.             Reimbursement of Business Expenses, Paid Time Off, Fringe
Benefits.
 
(a)  Business Expenses.  The Company shall pay, or promptly reimburse the
Executive for, all reasonable expenses incurred by the Executive in performing
his duties for the Company during the Term of this Agreement upon the
presentation of reasonably itemized statements of such expenses in accordance
with the Company’s policies and procedures now in effect or as such policies and
procedures may be modified from time to time, but with such reimbursement paid
in all events not later than the last day of the calendar year following the
calendar year in which the expense was incurred.
 
 
 
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(b)  Paid Time Off.  The Executive shall be entitled to the number of weeks of
paid time off per year provided to the Company’s senior executive officers in
accordance with Company’s vacation or other paid time off policies.
 
(c)  Welfare, 401(k) and Similar Benefit Plans.  During the Term of this
Agreement, the Executive shall be entitled to participate in and be covered
under all the welfare benefit plans or programs maintained by the Company from
time to time, including, without limitation, all medical, hospitalization,
dental, disability, accidental death and dismemberment and travel accident
insurance plans and programs.  In addition, during the Term of this Agreement,
the Executive shall be eligible to participate in and be covered under all
401(k), retirement, savings and other employee benefit and perquisite plans and
programs maintained from time to time by the Company.
 
5.             Termination.  This Agreement, and the Executive’s employment
hereunder, may be terminated under the following circumstances:
 
(a)  Death or Disability.  This Agreement, and the Executive’s employment
hereunder, shall terminate upon the Executive’s death or disability (which shall
be deemed to have occurred if the Executive is physically or mentally unable to
perform his duties hereunder for more than 30 days in any three (3) month
period).
 
(b)  By the Executive.  The Executive shall have the right to terminate this
Agreement, and the Executive’s employment hereunder, for any reason or for no
reason, including, without limitation, for Good Reason (as hereinafter
defined).  For purposes hereof, the term “Good Reason” shall mean any one or
more of the following events, unless the Executive specifically agrees in
writing that such event shall not be Good Reason:
 
   (i)  a material reduction of the Executive’s Base Salary;
 
   (ii)     a material diminution in the Executive’s authority,
responsibilities, or duties when compared to those applicable to the Executive
in his position as described in Section 1;
 
   (iii)    material acts or conduct on the part of the Company or its officers
and representatives that are designed to force the resignation of the Executive
or prevent the Executive from performing his duties and responsibilities
pursuant to this Agreement; or
 
   (iv)    a material breach by the Company of any material provision of this
Agreement (including, but not limited to, the failure of the Company to pay
timely any amount, or to provide any benefit, pursuant to the provisions of
Sections 3 and 4).
 
 
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The Executive shall provide the Company with written notice within ninety (90)
days of the initial existence of the event or condition that gives the Executive
Good Reason to terminate this Agreement and the Executive’s employment
hereunder, which notice will describe such event or condition.  In the case of
conduct described above, Good Reason will not be considered to exist unless the
Company is given thirty (30) days from the date of such notice to cure such
breach or condition to the reasonable satisfaction of the Executive.  If the
Company cures such breach or condition to the reasonable satisfaction of the
Executive within such thirty (30) day period, the Executive shall not be
entitled to terminate this Agreement, and the Executive’s employment hereunder,
for Good Reason as a result of such event or condition.
 
(c)  By the Company.  The Company shall have the right to terminate this
Agreement, and the Executive’s employment hereunder, for any reason or for no
reason, and with or without Cause (as hereinafter defined).  For purposes of
this Agreement, the Company shall have “Cause” to terminate this Agreement, and
the Executive’s employment hereunder:
 
   (i)      upon (A) the indictment (as hereinafter defined) or conviction of,
or plea of nolo contendere by, the Executive for (x) any felony or (y) a
misdemeanor involving moral turpitude, deceit, dishonesty or fraud, (B) the
existence of any factor or circumstance that prevents the Executive from serving
as General Counsel of a business enterprise that holds or desires to hold one or
more liquor licenses or (C) the failure of Executive to hold a license to
practice law in Florida or any other state of the United States;
 
   (ii)     upon the Executive's material violation of policies and procedures
of the Company as set forth from time to time;
 
   (iii)    as a result of the Executive’s gross negligence or willful
misconduct with respect to the Company or willful failure or refusal to perform
the Executive’s duties under this Agreement;
 
   (iv)    any act by the Executive of fraud, misappropriation or embezzlement
with respect to the Company or any of its affiliates or subsidiaries (monetarily
or otherwise);
 
   (v)     the Executive engaging in any activity in material violation of the
restrictions set forth in Section 8 hereof; or
 
   (vi)    upon a material breach by the Executive of any of the Executive’s
material obligations under this Agreement.
 
For purposes of this Agreement, the term “Indictment” shall mean an indictment,
probable cause hearing or any other procedure pursuant to which an initial
determination of probable or reasonable cause with respect to such offense is
made.
 
The Company shall provide the Executive with written notice describing any event
or condition that gives the Company Cause for terminating this Agreement and the
Executive’s employment hereunder.  In the case of conduct described in
paragraphs (ii), (iii) or (vi) above, Cause will not be considered to exist
unless the Executive is given thirty (30) days from the date of such notice to
cure such breach or condition to the reasonable satisfaction of the Board.  If
the Executive cures such breach or condition to the reasonable satisfaction of
the Board within such thirty (30) day period, then the Company shall not be
entitled to terminate this Agreement, and the Executive’s employment hereunder,
for Cause.
 
 
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6.             Termination Procedure.
 
(a)  Notice of Termination.  Any termination of this Agreement, and the
Executive’s employment hereunder, whether by the Company or by the Executive,
during the Term of this Agreement, except as a result of the Executive’s death,
shall be communicated by written notice of termination to the other party hereto
in accordance with Section 11(e).  Such notice of termination shall state the
specific termination provision in this Agreement relied upon in terminating this
Agreement, and the Executive’s employment hereunder, and the notice of
termination shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for such termination.
 
(b)  Date of Termination.  The effective date of any termination of this
Agreement, and the Executive’s employment hereunder, whether by the Company or
by the Executive, shall be, in the event of the Executive’s death, the date of
his death, or, in the event of termination for any other reason, the date on
which the notice of termination referred to in paragraph (a) of this Section 6
is given or any later date (within thirty (30) days after the giving of such
notice of termination) set forth in such notice of termination.  In any event,
however, the date of termination will not be earlier than the date of Separation
from Service within the meaning of Section 409A of the Internal Revenue Code of
1986, as amended
 
7.             Termination, Expiration and Sale of Company Compensation and
Benefit.  Under the circumstances described in this Section 7, Company shall
provide the Executive with the payments and benefits set forth below; provided,
however, as a specific condition to being entitled to any payments or benefits
under this Section 7 other than the “Accrued Compensation” as defined below, the
Executive must have resigned as a director, trustee and officer of the Company
and all of its subsidiaries and as a member of any committee of the board of
directors of the Company and its subsidiaries of which he is a member and must
have executed a Release in favor of the Company and its affiliates.  Executive
acknowledges and agrees that the payments set forth in this Section 7 constitute
liquidated damages for termination of his employment during the Employment
Period, which the parties hereto have agreed to as being reasonable, and
Executive acknowledges and agrees that he shall have no other remedies in
connection with or as a result of any such termination.
 
(a)  General Termination Provision.  Except as provided below, upon termination
of this Agreement, the Company shall pay to the Executive (or the Executive’s
estate, in the case of his death) immediately after the effective date of
termination the Executive’s Base Salary that has been fully earned but not yet
paid to the Executive as well as all expenses incurred by the Executive prior to
the effective date of termination that the Company is required to reimburse, but
had not yet reimbursed, the Executive for in accordance with the terms and
provisions of Section 4.
 
(b)  Termination without Cause or Resignation for Good Reason.  If this
Agreement, and the Executive’s employment hereunder, are terminated (1) by the
Company without Cause or (2) by the Executive for Good Reason, the Executive
shall be entitled to the sum of:
 
 
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   (i)       the Executive’s Base Salary and Bonus, in each case only to the
extent that the Base Salary and Bonus have been fully earned but not yet paid,
as well as all expenses incurred by the Executive prior to the effective date of
termination that the Company is required to reimburse, but had not yet
reimbursed, the Executive for in accordance with the terms and provisions of
Section 4 (all such compensation and expenses collectively referred to in this
Section as the “Accrued Compensation”); and
 
   (ii)     an amount equal to the sum of (A) one (1) times the Executive’s
then-current Base Salary and (B) one (1) times the Executive’s average Bonus for
the two (2) most recently completed fiscal years, with such Bonus pro-rated
based on the portion of the Company’s current fiscal year that has elapsed on
the effective date of termination, which total amount shall be paid in
accordance with paragraph (c) of this Section 7.
 
(c)  Timing of Payments; Compliance with Section 409A of the Code.  The Accrued
Compensation shall be paid within 10 business days after the effective date of
termination, and other amounts payable pursuant to this Section 7 shall be paid
on the 60th day after the effective date of termination, except to the extent
that payment of any such amounts is required to be delayed in order to satisfy
the requirements of Section 409A of the Internal Revenue Code of 1986, as
amended (“Section 409A”), in which case the amounts the payment of which is
required to be delayed in order to satisfy the requirements of Section 409A
shall accrue interest at the prime rate as reported in the Wall Street Journal
on the 60th day after the effective date of termination (or the nearest business
day if such date is not a business day) and shall be paid in a lump sum to the
Executive as soon as permitted without causing a violation of Section
409A.  This Agreement is intended to comply with the applicable requirements of
Section 409A and its corresponding regulations and related guidance and shall be
administered in accordance with Section 409A to the extent such section
applies.  Notwithstanding anything in this Agreement to the contrary, to the
extent that Section 409A applies to payments under this Section 7, or any other
section of this Agreement, such payments may only be made in a manner permitted
by Section 409A and the Company shall use its best efforts to comply with the
guidance of the Internal Revenue Service to ensure compliance, and in the event
of non-compliance, limit penalties incurred.
 
8.             Non-Disclosure, Non-Solicitation and Related Obligations.
 
(a)  Executive Acknowledgements. The Executive acknowledges (i) that during the
Term and as a part of the Executive’s employment hereunder, the Executive shall
be afforded access to Confidential Information (as hereinafter defined), (ii)
that public disclosure or utilization of such Confidential Information in
violation of this Agreement could have a material and adverse impact on the
Company and its business and (iii) that, accordingly, the non-disclosure
provisions of this Agreement are reasonable and necessary to prevent the
improper use or disclosure of Confidential Information.  The Executive further
acknowledges (w) that the Company’s business is national in scope and its
restaurants are marketed throughout the United States, (x) that the Company and
its services compete with other businesses and restaurants located throughout
the United States, (y) that the Company provides resources and training to the
Company’s employees (including the Executive) related to the Company’s services
and processes that are available only to the Company’s employees and cannot be
acquired outside of the Company and (z) that, accordingly, the non-solicitation
and related restrictive provisions of this Agreement are reasonable and
necessary to protect the Company’s goodwill with its customer base, its
investment in its employees and its interests in its Confidential Information.
 
 
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(b)  Non-Disclosure Obligation.  Without the prior written consent of the
Company, except as may be required by applicable law, rule or regulation, the
Executive will not, at any time, either during or after his employment with the
Company, directly or indirectly, divulge or disclose to any person or entity,
including, without limitation, any future employer, or use for the Executive’s
own or others’ benefit or gain, any financial information, plans for expansion,
prospects, customers, tenants, suppliers, clients, sources of leads, methods of
doing business, intellectual property, plans, products, data, results of tests
or any other trade secrets or confidential materials or like information of the
Company, including, without limitation, any and all information and
instructions, technical or otherwise, prepared or issued for the use of the
Company (collectively, the “Confidential Information”), it being the intent of
the Company, with which intent the Executive hereby agrees, to restrict the
Executive from dissemination or using any like information that is not readily
available to the general public.
 
(c)  Information is Property of the Company.  All books, records, accounts,
customer, client and other lists, customer and client street and e-mail
addresses and information (whether in written form or stored in any computer
medium) relating in any manner to the business, operations, or prospects of the
Company, whether prepared by the Executive or otherwise coming into the
Executive’s possession, shall be the exclusive property of the Company and shall
be returned immediately to the Company upon the expiration of this Agreement or
earlier termination of the Executive’s employment with the Company, or at the
Company’s request at any time.  Upon the expiration of this Agreement or earlier
termination of the Executive’s employment with the Company, the Executive shall
immediately deliver to the Company all lists, books, records, schedules, data
and other information (including all copies thereof) of every kind relating to
or connected with the Company and its activities, business and customers.
 
(d)  Covenant Not to Solicit.  The Executive agrees that, during the Term and
for a period of two (2) years after the termination (but not the expiration) of
this Agreement, and the Executive’s employment hereunder (not including any
expiration upon non-renewal) (such two (2) year period, the “Post-Employment
Restricted Period”), the Executive shall not, directly or indirectly, without
the prior written consent of the Company, interfere with or disrupt or diminish
or attempt to disrupt or diminish, or take any action that could reasonably be
expected to disrupt or diminish, any past, present or prospective relationship,
contractual or otherwise, between the Company and any customer, supplier,
consultant, employee or independent contractor of the Company.
 
(e)  No Raiding.  The Executive agrees that, during the Term and throughout the
Post-Employment Restricted Period, the Executive shall not, directly or
indirectly, without the prior written consent of the Company, solicit, recruit,
employ or otherwise engage as an employee, independent contractor, consultant or
advisor or attempt to solicit, recruit, employ or otherwise engage as an
employee, independent contractor, consultant or advisor, any person who is or
was an employee, independent contractor, consultant or advisor of or to the
Company at any time during the Executive’s last twelve (12) months of employment
with the Company, or in any manner induce or attempt to induce any person who is
or was during the Executive’s last twelve (12) months of employment with the
Company an employee, independent contractor, consultant or advisor of or to the
Company to terminate that person’s relationship with the Company.
 
 
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(f)  Non-Disparagement.  The Executive agrees that he will not, directly or
indirectly, disparage the Company or disseminate, or cause or permit others to
disseminate, negative statements regarding the Company or any employee, officer,
director or agent of the Company.  Notwithstanding the foregoing, the Executive
is not barred or otherwise restricted from exercising any right of speech or
expression protected by applicable law, rule or regulation.  The Company agrees
that it will not, directly or indirectly, disparage the Executive or
disseminate, or cause or permit others to disseminate, negative statements
regarding the Executive.
 
(g)  Survival. The obligations contained in this Section 8 shall survive the
termination of this Agreement and, as applicable, shall be fully enforceable
thereafter in accordance with the terms hereof.
 
9.             Enforcement and Remedies.
 
(a)  Enforcement. It is the desire and intent of the Company and the Executive
that the provisions of this Agreement be enforced to the fullest extent
permissible under the laws, rules, regulations and public policies applied in
each jurisdiction in which enforcement is sought. Accordingly, although the
Executive and the Company consider the provisions of this Agreement to be
reasonable for the purpose of preserving and protecting the legitimate interests
of the Company, if any particular provision of this Agreement shall be
adjudicated to be invalid or unenforceable, such provision shall be deemed
amended to delete the portion thus adjudicated to be invalid or unenforceable,
such deletion to apply only with respect to the operation of such provision in
the particular jurisdiction in which such adjudication is made.  Additionally,
it is expressly understood and agreed that, although the Company and the
Executive consider the provisions contained in this Agreement to be reasonable,
if a final determination is made by a court of competent jurisdiction that the
time or territory or any other restriction contained in this Agreement,
including, without limitation, in Section 8, is unenforceable against the
Executive, the provisions of this Agreement shall be deemed amended to apply as
to such maximum time and territory and to such maximum extent as such court may
judicially determine or indicate to be enforceable.
 
(b)  Remedies. The Company and the Executive acknowledge that the Company’s
damages at law would be an inadequate remedy for the breach or threatened breach
by the Executive of any provision of Section 8.  Accordingly, the Company and
the Executive agree, in the event of any such breach or threatened breach, that
the Company shall be entitled to  seek temporary and permanent injunctive or
other equitable relief restraining the Executive from such breach or threatened
breach, as the Company may deem appropriate, without the accounting of all
earnings, profits, and other benefits arising from any such breach or threatened
breach.  The rights of the Company under this paragraph shall be cumulative and
in addition to any other rights or remedies available to the Company hereunder
or at law or in equity.
 
 
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10.           Indemnity.  The Company shall, to the fullest extent permitted
under the laws of the State of Delaware and the Company’s bylaws, indemnify,
defend (with counsel selected by the Company) and hold harmless the Executive
from and against all liabilities, costs and expenses, including, but not limited
to, amounts paid in satisfaction of judgments, in settlement or as fines or
penalties, and counsel fees and disbursements, reasonably incurred by the
Executive in connection with the defense or disposition of, or otherwise in
connection with or resulting from, any action, suit or other proceeding, whether
civil, criminal, administrative or investigative, before any court or
administrative or legislative or investigative body, in which the Executive may
be or may have been involved as a party or otherwise or with which the Executive
may be or may have been threatened, while in office or thereafter, by reason of
the Executive’s being an officer of the Company or by reason of any action taken
or not taken in such capacity, except with respect to any matter as to which the
Executive shall have been finally adjudicated by a court of competent
jurisdiction not to have acted in good faith in the reasonable belief that his
action was in the best interests of the Company.  The Executive shall notify the
Company in writing within ten days of any claim with respect to which indemnity
may be sought hereunder.  The Executive agrees to the control of the defense of
such claim by the Company and to the Company’s settlement of any such claim.
 
11.           Miscellaneous.
 
(a)  Withholding.  The Company shall withhold such amounts from any compensation
or other benefits payable to the Executive under this Agreement on account of
payroll and other taxes as may be required by applicable law, rule or
regulation.
 
(b)  Successors; Binding Agreement.  This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective heirs,
successors, permitted assigns and personal representatives.
 
(c)  Entire Agreement. This Agreement contains the entire understanding between
the Company and the Executive and supersedes any and all other oral and written
agreements or understandings between them.
 
(d)  Controlling Law; Venue. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Florida, without regard to its conflicts of law principles.  Each of the Company
and the Executive unconditionally and irrevocably agrees that the exclusive
forum and venue for any action, suit or proceeding shall be in Miami-Dade
County, Florida, and each consents to submit to the exclusive jurisdiction,
including, without limitation, personal jurisdiction, and forum and venue of the
Circuit Courts of the State of Florida or the United States District Court for
the Southern District of Florida, in each case, located in Miami-Dade County,
Florida.
 
(e)  Notice.  All notices or other communications that are required or permitted
hereunder shall be in writing and delivered personally, or sent by
nationally-recognized, overnight courier or by registered or certified mail,
return receipt requested and postage prepaid, addressed as follows:
 
 
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To the Company:
Benihana Inc.
8685 Northwest 53rd Terrace
Miami, Florida  33166
Attention:  General Counsel
 
To the Executive:
Mr. David Flanery
[the most recent address provided to the
Company for payroll tax reporting purposes]

or to such other address as either party may furnish to the other in writing in
accordance herewith.  All such notices and other communications shall be deemed
to have been received (i) in the case of personal delivery, on the date of such
delivery, (ii) in the case of delivery by nationally-recognized, overnight
courier, on the first business day immediately following dispatch and (iii) in
the case of mailing, on the third business day following such mailing.
 
(f)  Amendment and Waiver.  No provision of this Agreement may be amended,
modified or canceled unless such amendment, modification or cancellation is
agreed to in a writing signed by the Executive and by a duly authorized officer
of the Company, and no provision of this Agreement may be waived unless such
waiver is set forth in a writing signed by the party to be charged.
 
(g)     Survival of Rights and Obligations. The respective rights and
obligations of the Executive and the Company set forth in this Agreement shall
survive the expiration or earlier termination of this Agreement to the extent
necessary for the intended preservation of such rights and obligations.
 
(h)     Validity.  If any provision of this Agreement shall for any reason be
finally held illegal, invalid or unenforceable by a court or agency of competent
jurisdiction, such provision shall be modified by such court or the parties, as
the case may be, so as to cause such provision to be legal, valid and
enforceable to the maximum extent permitted by law (and to the extent modified,
it shall be modified so as to reflect, to the extent possible, the intent of the
parties) and shall in no way affect or impair the legality, validity or
enforceability of the remaining provisions of this Agreement, which shall remain
in full force and effect, and this Agreement shall be interpreted as if such
illegal, invalid or unenforceable provision was not contained in this Agreement.
 
(i)  Counterparts.  This Agreement may be executed in counterparts, each of
which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
 
(j)  Headings.  All section and paragraph headings in this Agreement are for
convenience of reference only and in no way define, limit or describe the scope
of this Agreement or the intent of any provision hereof.
 
 
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The parties hereto have duly executed this Agreement as of the date and year
first above written.
 

 
BENIHANA INC.,
 
a Delaware corporation
              By:
/s/ Richard C. Stockinger
    Name:
Richard C. Stockinger
    Title: President and Chief Executive Officer                      
/s/ David Flanery
   
DAVID FLANERY

 
 
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EXHIBIT A

AMENDED AND RESTATED
EMPLOYEE RESTRICTED STOCK AGREEMENT
UNDER THE 2007 EQUITY INCENTIVE PLAN
OF BENIHANA INC.

(Effective as of August 22, 2011)

In consideration of services to be rendered by you (the “Grantee”) to Benihana
Inc., a Delaware corporation (the “Company”) or its subsidiary, you have been
awarded a stock grant (the “Grant”) under the Company’s 2007 Equity Incentive
Plan (the “2007 Plan”), which is incorporated herein by reference, covering a
number of shares  (the “Shares”) of Class A Common Stock of the Company, par
value $.10 per share (the “Common Stock”) as listed on Exhibit A (the
“Information Page”) subject to the terms and conditions of this Agreement and
the 2007 Plan.
 
1.             STOCK GRANT TERMS AND STOCK CERTIFICATES.  The Information Page
sets forth, among other things:  (a) the date of the Grant; (b) the total number
of Shares subject to the Grant; (c) the Vesting Service Dates (as defined in
Paragraph 2 hereof); (d) the Vesting Prices (as defined in Paragraph 2 hereof);
(e) the number of Shares subject to the Grant that vest (in the manner described
in Paragraph 2 hereof) on the later to occur of (i) each Vesting Service Date
and (ii) each Vesting Price Date (as defined in Paragraph 2 hereof); and (f) if
any, the per Share consideration for the Grant. The stock certificate(s), if
any, evidencing the Shares underlying the Grant shall be registered on the
Company’s books in the name of the Committee (as defined in Paragraph 13 hereof)
as of the date of Grant.  Physical possession or custody of any such stock
certificate(s) shall be retained by the Company or by a bank or other
institution designated by the Company, until such Shares are vested or forfeited
in accordance with the terms of this Agreement.  While in its possession, the
Company reserves the right to place a legend on the stock certificate(s)
restricting the transferability of such certificate(s) and referring to the
terms and conditions (including, without limitation, forfeiture) relating to the
Shares represented by the stock certificate(s).  If the Shares subject to the
Grant have been evidenced by stock certificate(s) pursuant to this Paragraph,
then as soon as practicable after the end of the applicable Restricted Period
(as defined in Paragraph 2 hereof), the Company shall cause unlegended stock
certificate(s) covering the requisite number of vested Shares registered on the
Company’s books in the name of the Grantee (or his permitted transferee pursuant
to Paragraph 5 hereof), to be delivered to such person and will cancel the
legended stock certificates.  Shares issued hereunder shall be fully paid and
non-assessable.
 
 
 

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2.             VESTING.  

(a)           General Vesting.  Except as otherwise set forth herein, the number
of Shares underlying the Grant as listed on the Information Page will become
vested and non-forfeitable on the date on which the applicable Restricted Period
lapses, provided that, on the date on which such applicable Restricted Period
lapses, the Grantee continues to be employed by the Company (the “Condition”). 
Promptly following the lapse of each applicable Restricted Period, the Stock
Plan Administrator will deliver to the Grantee (or his permitted transferee
pursuant to Paragraph 5 hereof) the number of Shares with respect to which the
Condition was satisfied on the date on which such applicable Restricted Period
lapsed, subject to any amounts that are withheld pursuant to Paragraph 9.  The
“Restricted Period” shall mean, with respect to any Share underlying the Grant,
the period of time commencing on the date of the Grant and ending on the later
to occur of (i) the applicable Vesting Service Date as listed on the Information
Page (the “Vesting Service Date”) and (ii) the applicable Vesting Price
Date.  The “Vesting Price Date” shall mean, with respect to any Share underlying
the Grant, the date on which the average closing price of a share of Common
Stock (as reported on the national stock exchange or interdealer quotation
system on which the Common Stock is principally traded) for the then immediately
preceding ninety (90) calendar days (the “Average Vesting Price”) equals or
exceeds the applicable vesting price as listed on the Information Page (the
“Vesting Price”).

(b)           Special Vesting Upon Sale of Company or Change in Control of
Company.

(i)            Notwithstanding Paragraph 2(a), above, if a Sale of the Company,
as defined below, occurs and the value per share of Common Stock reflected in
the transaction giving rise to the Sale of the Company equals or exceeds $10 per
share (with any non-cash consideration valued at fair market value), then from
and after the occurrence of such Sale of the Company, the restrictions
comprising both the Vesting Service Date and Vesting Price Date components of
the Restricted Period shall be deemed to be satisfied with respect to all Shares
underlying the Grant.  Unless otherwise agreed to in writing by the Grantee and
the Company prior to the event, a “Sale of the Company” means the occurrence of
both (A) approval or recommendation by the Board of Directors of the Company
(the “Board”) of a transaction that the Board determines is designed to result,
directly or indirectly, in the acquisition  by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”))  of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50
percent  of the then outstanding Common Stock of the Company and (B) closing of
such transaction, regardless of the percentage of Common Stock actually sold in
the transaction.  For purposes of determining whether a Sale of the Company has
occurred, any outstanding stock of the Company to be exchanged in the
transaction for stock of an acquiring or surviving entity shall be treated as
being acquired in the transaction by such individual, entity or group.

(ii)           Notwithstanding Paragraph 2(a), above, if a Change in Control of
the Company, as defined below, occurs, then from and after the occurrence of
such Change in Control, the restrictions comprising both the Vesting Service
Date and Vesting Price Date components of the Restricted Period shall be deemed
to be satisfied with respect to all Shares underlying the Grant.  Unless
otherwise agreed to in writing by the Grantee and the Company prior to the
applicable event, a “Change in Control” shall mean:
 
A.           the acquisition  by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”) directly or indirectly  (a “Person”) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of more than 50% of either the then outstanding stock of the
Company or the combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of directors of the
Company; or
 
 
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B.          the consummation of a reorganization, merger or consolidation, or
sale or other disposition of all or substantially all of the assets of the
Company (a “Business Combination”), in each case unless immediately following
such Business Combination, persons and entities who were the beneficial owners
of at least 50% of the outstanding stock of the Company immediately prior to
such Business Combination beneficially own, directly or indirectly, at least 50%
of the combined voting power entitled to vote generally in the election of
directors of the corporation resulting from such Business Combination.

(c)           “Average Vesting Price” After Cessation of Public Trading

If less than all of the Shares underlying the Grant have vested at or prior to
the time, if any, that the Common Stock is no longer traded on a national
securities exchange or quoted on an interdealer quotation system, then,
following the end of each calendar quarter, the Committee shall determine the
deemed value of the shares that shall be deemed the applicable “Average Vesting
Price.”  If any Shares underlying the Grant vest pursuant to this Paragraph 2(c)
after the time, if any, that the Common Stock is no longer traded on a national
securities exchange or quoted on an interdealer quotation system, then the
Grantee shall have the right to sell to the Company, and, upon written notice
thereof from the Grantee, the Company shall purchase from the Grantee, such
vested Shares for the price per Share of the Average Vesting Price determined by
the Committee with respect to the calendar quarter immediately preceding the
date on which such Shares have vested.  Such purchase by the Company shall be
consummated within 45 days after receipt of the written notice from the Grantee.
 
3.             FORFEITURE OF UNVESTED SHARES UPON TERMINATION OF EMPLOYMENT.  

(a)           General – Forfeiture Upon Termination of Employment

Except (i) with respect to Shares that have vested pursuant to Paragraph 2 on or
before the employment termination date, and (ii) as provided below, in the event
that the Grantee ceases as an employee of the Company for any reason during the
Restricted Period (including, without limitation, due to death or disability),
all unvested Shares subject to the Grant shall be forfeited by the Grantee as of
the date that such employment terminates.  Any Shares covered by the Grant that
are forfeited by the Grantee shall be transferred to the Company and have the
status of treasury shares.  The Committee in its discretion may waive in whole
or in part any time-based Conditions that have not been satisfied except in
connection with an employment termination for gross misconduct.

 
(b)
Special Vesting Upon Sale of Company After Termination of Employment Without
Cause or for Good Reason

 
 
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In the event that the employment of the Grantee pursuant to that certain
Employment Agreement between the parties in effect on the date of Grant (the
“Employment Agreement’) is terminated by the Company without Cause or by the
Executive for Good Reason (as defined in the Employment Agreement) during the
Restricted Period and within six months before the occurrence of either (i) a
Sale of the Company, as defined in Paragraph 2(b), above, in which the value per
share of Common Stock reflected in the transaction giving rise to the Sale of
the Company equals or exceeds $10 per share (with any non-cash consideration
valued at fair market value) or (ii) a Change of Control, as defined in
Paragraph 2(b) above, then in either case, notwithstanding subparagraph (a) of
this Paragraph 3, the restrictions comprising both the Vesting Service Date and
Vesting Price Date components of the Restricted Period shall be deemed to be
satisfied (as of the occurrence of such Sale or Change of Control) with respect
to all Shares underlying the Grant.

4.             EMPLOYMENT. In consideration of the awarding of the Grant, the
Grantee will fulfill all the duties and obligations of his employment by the
Company or its subsidiary.  Nothing in this Agreement shall confer upon the
Grantee any right to similar stock grants in future years or any right to be
continued in the employ of the Company or its subsidiaries or shall interfere in
any way with the right of the Company or any such subsidiary to terminate or
otherwise modify the terms of the Grantee's employment.
 
5.             RESTRICTIONS ON TRANSFER.  Except with respect to Shares that
have vested pursuant to Paragraph 2, the Shares subject to the Grant shall not
be transferable during the Restricted Period except as the Committee may permit
to the extent permitted under the 2007 Plan, on a general or specific basis,
subject to such conditions and limitations as may be determined by the
Committee.  More particularly (but without limiting the generality of the
foregoing), during the Restricted Period the Shares (other than Shares that have
vested pursuant to Paragraph 2) may not be assigned, transferred (except as
provided above), pledged or hypothecated in any way, shall not be assignable by
operation of law and shall not be subject to execution, attachment, pledge,
hypothecation or other disposition contrary to the provisions hereof, and the
levy of any execution, attachment or similar process upon the Shares shall be
null and void and without effect.
 
6.             EFFECT ON OTHER BENEFITS.  In no event shall the value of the
Shares covered by the Grant awarded under this Agreement at any time be included
as compensation or earnings for purposes of determining any other compensation,
retirement benefit or other benefit offered to employees of the Company or its
subsidiaries under any benefit plan of the Company unless otherwise specifically
provided for in such benefit plan.
 
7.             LEGAL COMPLIANCE.  The Company shall pay all original issue and
transfer taxes with respect to the issuance of such Shares and all other fees
and expenses necessarily incurred by the Company in connection therewith and
will from time to time use its best efforts to comply with all laws and
regulations that, in the opinion of counsel for the Company, shall be applicable
thereto.
 
8.            REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF GRANTEE.  The
Grantee hereby represents and warrants to the Company that he: (i) has the legal
right and capacity to enter into this Agreement and fully understands the terms
and conditions of this Agreement and (ii) is acquiring the Shares for investment
purposes only and not with a view to, or in connection with, the public
distribution thereof in violation of the Securities Act of 1933, as now in force
or hereafter amended (the “Securities Act”).  The Grantee agrees he will not
transfer the Shares except in compliance with any rules and regulations in force
at the time of such transfer under the Securities Act, or any other applicable
law, and a legend to this effect may be placed upon the certificate representing
the Shares.
 
 
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9.             TAXES.  The Grantee must pay or cause to be paid to the Company
in cash upon demand any and all amounts due for the purpose of satisfying the
Company’s liability, if any, to withhold federal, state or local income tax or
employment tax (plus interest or penalties thereon, if any, caused by a delay by
the Grantee in making such payment) incurred by reason of the receipt of the
Grant (including any such taxes incurred as a result of the Grantee’s election
pursuant to Paragraph 10 hereof) or by reason of the vesting of the Shares in
accordance with the terms of this Agreement.  By accepting this Grant, the
Grantee consents and directs that the Stock Plan Administrator may, but is not
obligated to, withhold the number of Shares having an aggregate fair market
value as of the date preceding the withholding sufficient to satisfy the
Grantee’s obligations hereunder and to deliver such Shares to the Company.  In
addition, the Company shall, to the extent permitted by law, have the right to
deduct such required withholding from any payment of any kind otherwise due to
the Grantee.  The Grantee shall consult his or her own tax advisors regarding
the tax consequences to him or her of the receipt of the Shares, of the making
of the election pursuant to Paragraph 10 hereof, or of any particular
transaction relating to the Shares.
 
10.          TAX ELECTION. The Grantee hereby agrees to deliver to the Company a
signed copy of any documents he may file with the Internal Revenue Service
evidencing an election under Section 83(b) of the Internal Revenue Code of 1986
as amended, which copy shall be delivered to the Company within five (5)
business days after the date on which any such election is made.
 
11.          CONDITION PRECEDENT TO GRANT. In the event that the award of the
Grant shall be subject to, or shall require, any prior exchange listing,
shareholder approval or other condition or act, pursuant to the applicable laws,
regulations or policies of any stock exchange, federal or local government or
its agencies or representatives, then the Grant hereunder shall not be deemed
awarded until the fulfillment of such condition.
 
12.          RIGHTS AS A STOCKHOLDER.  Subject to the terms and conditions of
this Agreement and the 2007 Plan, including, without limitation, the
restrictions on transfer and the risk of forfeiture applicable to the Shares
covered by the Grant during the Restricted Period, from and after the date of
Grant, the Grantee shall have all the rights of a stockholder of the Company
with respect to the Shares covered by the Grant, including the right to vote the
Shares and the right to receive dividends or other distributions paid thereon,
provided that any non-cash dividends will be subject to the terms and conditions
of the 2007 Plan and this Agreement and will be held in the same manner as the
Shares covered by the Grant.
 
 
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13.          ADMINISTRATION.  The Compensation and Stock Option Committee (the
“Committee”) shall have full authority and discretion, subject only to the
express terms of the 2007 Plan, to decide all matters relating to the
administration and interpretation of the 2007 Plan and this Agreement and the
Grantee agrees to accept all such Committee determinations as final, conclusive
and binding.  The Company may designate an internal department or may retain a
third-party plan administrator to assist in the administration of the 2007
Plan.  The term “Stock Plan Administrator” as used herein shall mean such
internal department or such third-party plan administrator as designated by the
Company from time to time. 
 
14.          COSTS.  The Company shall not charge the Grantee for any part of
the Company’s cost to administer and operate the 2007 Plan.  
 
15.          AMENDMENT.  This Agreement shall be subject to the terms of the
2007 Plan, as may be amended by the Company from time to time, except that no
amendment of the 2007 Plan adopted after the date of this Agreement shall impair
the Grantee’s rights hereunder without his or her consent.  In addition to the
foregoing, this Agreement may be amended by the Committee, provided that no such
amendment shall impair the Grantee’s rights hereunder without his or her
consent.

16.          DATA PRIVACY.  By entering into this Agreement, the Grantee (a)
authorizes the Company and its subsidiaries and the Stock Plan Administrator or
any agent of the Company providing recordkeeping services for the 2007 Plan to
disclose to each other such information and data as either of them shall request
in order to facilitate the award of Grants and the administration of the 2007
Plan; (b) waives any data privacy rights the Grantee may have with respect to
such information; and (c) authorizes the Company and the Stock Plan
Administrator or any agent of the Company providing recordkeeping services for
the 2007 Plan to store and transmit such information in electronic form.
 
17.          NOTICES. All notices and communications by the Grantee (or his or
her permitted transferee) in connection with this Agreement or the Shares
granted hereunder shall be delivered to the Stock Plan Administrator.  Unless
otherwise directed by the Company, notices to the Stock Plan Administrator shall
be delivered in writing by nationally recognized overnight courier, certified
mail, postage prepaid or by facsimile to the attention of Chief Financial
Officer, Benihana Inc., 8685 N.W. 53rd Terrace, Miami, Florida 33166 (facsimile:
(305) 592-6371).  In the event the Company retains a third party plan
administrator to administer the 2007 Plan, the Grantee will be advised of the
procedure to provide notices to such third party plan administrator and the
Company. All notices and communications by the Stock Plan Administrator or the
Company to the Grantee (or his or her permitted transferee) in connection with
this Agreement shall be given in writing and shall be delivered electronically
to the Grantee’s e-mail address appearing on the records of the Company, or by
nationally recognized overnight courier or certified mail, postage prepaid to
the Grantee’s residence or to such other address as may be designated in writing
by the Grantee.

18.          ENTIRE AGREEMENT AND WAIVER.  This Agreement and the 2007 Plan
contain the entire understanding of the parties and supersede any prior
understanding and agreements between them representing the subject matter
hereof.  To the extent that there is an inconsistency between the terms of the
2007 Plan and this Agreement, except as specifically set forth herein, the terms
of the 2007 Plan shall control.  There are no other representations, agreements,
arrangements or understandings, oral or written, between the parties hereto
relating to the subject matter hereof that are not fully expressed herein or in
the 2007 Plan.  Any waiver or any right or failure to perform under this
Agreement shall be in writing signed by the party granting the waiver and shall
not be deemed a waiver of any subsequent failure to perform.
 
 
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19.          SEVERABILITY AND VALIDITY.  The various provisions of this
Agreement are severable and any determination of invalidity or unenforceability
of any one provision shall have no effect on the remaining provisions.
 
20.          GOVERNING LAW.  The interpretation, enforceability and validity of
this Agreement shall be governed by the substantive laws (but not the choice of
law rules) of the State of Florida.
 
21.          SUBSIDIARY. As used herein, the term “subsidiary” shall mean any
present or future corporation that would be a “subsidiary corporation” of the
Company, as that term is defined in Section 424(f) of the Internal Revenue Code
of 1986, as amended.
 
22.          HEADINGS; DEFINITIONS.  Paragraph and other headings contained in
this Agreement are for reference purposes only and are in no way intended to
describe, interpret, define or limit the scope, extent or intent of the Option
or any provision hereof.  Capitalized terms not otherwise defined herein have
the meanings ascribed to them in the 2007 Plan.

* * *
 
By my signature below I am accepting the stock grant described on the
Information Page annexed hereto as Exhibit A, subject to the terms and
conditions contained in this Amended and Restated Employee Restricted Stock
Agreement and the 2007 Plan.
 

Dated:  August 22, 2011            /s/ David Flanery       Name: David Flanery  
       
Approved:
   
BENIHANA INC.
            By:  /s/ Richard C. Stockinger      

 
 
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EXHIBIT A

INFORMATION PAGE

 

Name of Grantee: David Flannery     Date of Grant: August 22, 2011     Number of
Shares of Stock Grant:   150,000     Per Share Consideration: None     Fair
Market Value on the Date of Grant: $7.41    
Vesting Schedule:
 

 
 
Number of Shares
 
Vesting Service Dates
 
Vesting Prices
12,487
July 1, 2012
$10.00
12,487
July 1, 2013
$10.00
12,487
July 1, 2014
$10.00
12,487
July 1, 2012
$13.00
12,487
July 1, 2013
$13.00
12,487
July 1, 2014
$13.00
25,000
July 1, 2012
$20.00
25,000
July 1, 2013
$20.00
25,000
July 1, 2014
$20.00

 
Under Paragraph 2(a) of the accompanying Employee Restricted Stock Agreement,
the Shares vest upon the lapse of the applicable “Restricted Period.” The
“Restricted Period means, with respect to any Share underlying the Grant, the
period commencing on the date of the Grant and ending on the later to occur of
(i) the applicable Vesting Service Date set forth on this Information Page and
(ii) the applicable Vesting Price Date.  The “Vesting Price Date” means, with
respect to any Share underlying the Grant, the date on which the average closing
price of a share of Common Stock (as reported on the national stock exchange or
interdealer quotation system on which the Common Stock is principally traded)
for the then immediately preceding ninety (90) calendar days (the “Average
Vesting Price”) equals or exceeds the applicable Vesting Price set forth on this
Information Page.
 
Thus, the Shares listed in the first line of the schedule are fully vested as of
the Date of Grant.  The Shares listed in each remaining line of the schedule
will vest on the later of the listed Vesting Service Date or the date on which
the Average Vesting Price for such Shares equals or exceeds the listed Vesting
Price.
 
Special vesting rules are provided in Paragraphs 2(b) and 2(c) of the
accompanying Employee Restricted Stock Agreement.
 
Paragraph 3 of the accompanying Employee Restricted Stock Agreement contains
rules regarding forfeiture of unvested Shares upon termination of employment.

8