1. Hospitality Included Intro Thank you all for being here today.
One of the largest fear we have heard is a concern that we are robbing Peter to pay Paul and we want to acknowledge that fear.
The only reason we have embarked on this journey is to make the lives of all our people better than before.
There are 3 ways we want your lives to get better
We want you to feel better emotionally
We want you to grow financially
We want you to grow professionally and we want USHG to be a place where you can advance your career
And if we don’t do all of those things then we will have failed
We have analyzed and painfully cared for the model with that in mind.
What we are presenting to you today is the way we believe that we can make life better for our people and if we do not, we will fail.
Trust is a big part of this exchange
We have trusted you – USHG believes that we are the right team because they believe that we have what it takes to be pioneers
We have brought you in early even though we were advised not to and shared our intentions before details were confirmed
We have worked hard to professionalize our environment in the past few years, and we need to take the next step forward together
And now we ask for your trust

2. Hospitality Included Intro Thank you all for being here today.
One of the largest fear we have heard is a concern that we are robbing Peter to pay Paul and we want to acknowledge that fear.
The only reason we have embarked on this journey is to make the lives of all our people better than before.
There are 3 ways we want your lives to get better
We want you to feel better emotionally
We want you to grow financially
We want you to grow professionally and we want USHG to be a place where you can advance your career
And if we don’t do all of those things then we will have failed
We have analyzed and painfully cared for the model with that in mind.
What we are presenting to you today is the way we believe that we can make life better for our people and if we do not, we will fail.
Trust is a big part of this exchange
We have trusted you – USHG believes that we are the right team because they believe that we have what it takes to be pioneers
We have brought you in early even though we were advised not to and shared our intentions before details were confirmed
We have worked hard to professionalize our environment in the past few years, and we need to take the next step forward together
And now we ask for your trust

3. Why are we doing this?
To provide professional and financial growth for all of our people
Hospitality is a team sport, and our current system doesn’t reflect the true nature of the culture you are a part of.

4. Why are we doing this? As a profession we want to:
Improve Culinary Team pay while providing career growth
Keep the Service Team neutral or better, while providing career growth
Make management a viable step for all
Minimize the impact to our guests
We believe USHG can and should be a career, not just a job

5. So why do we have to eliminate tipping?
For two years we’ve explored every avenue to accomplish our goal
We found that tipping is fundamentally linked to the gap between our kitchen and service teams – the rules and regulations around who can share in tips and when makes it impossible to function as One Team
Every cost we have as a business is baked into our menu prices – except for your hard work.
Every raise we give our kitchen team ultimately leads to a raise for our service team. Yet our service team can receive a raise that is not shared with our kitchen team
Press has made this our #1 reason. It’s not.
Other options: Admin, service charges, ticketing, pay hourly, pay salary

6. So how are we going to do it?
We are going to raise base wages for all hourly staff
$9.00/hr for our Service Team
$11.00/hr for our Operations Team (Stewarding and Receiving)
$11.00/hr for our Kitchen Team
$14.00/hr for our Line Cooks
In an addition to hourly rates, we are also looking to offer a variable compensation plan tied to the success of our business.

7. Art Food BOH Progression Ladder
JOB GROUP GOAL BASE WAGE
Hourly Rate
Position
Low
High
Chef de Partie
$14.00
$18.00
Butcher
$22.00
Pastry Cook
Line Cook
Garde Manger
$11.00
$13.50
Prep Cook
$13.00
Receiver
$11.50
Steward
$15.00
Runner
$12.00
Extern -
Sous Chef
Sous Chef
Salary + Benefits
Salary + Benefits
Chef de Partie
Chef de Partie
$18 – 22
$18 – 22
Pastry Cook $
Line Cook
Butcher
$14 – 22
Garde Manger $
Intern $
Prep Cook
$11 – 13
Porter
Receiver $

8. So how are we going to do this?
The first step is launching a Revenue Sharing program for the Service Team, and our goal is to eventually include our kitchens in the financial wins of the restaurant.
Why wait for BOH?
Steep learning curve and want to be sure to bring guests along with us to ensure long-term success
We opted for consistency of earnings:
Hourly Rates for our Kitchen Team
Variable Pay for our Service Team
Why Revenue Share?
Allows the team to share in the success of the business, with no earnings ceiling
We will be raising our menu prices to reflect the true cost of doing business
No Service Charge, No Admin Fee, No Tip Line

9. So what is Revenue Share?
How is Revenue Share calculated?
Revenue share at The Modern is over the entire week, not dependent on shifts worked or if guests leave a tip or not
Each individual will receive shares based on their position, skill level, and overall contribution to the success of the team
Those shares combine with hours worked to get total shares for that week
If you earn 60 shares and work 40 hours that week, you would have 2,400 individual weekly shares that week.
All individuals weekly shares combine to form that week’s “Outstanding Shares.”
If you divide the entire Revenue Share Pool (more on this later) by the outstanding shares, you’ll get that week’s individual share value.
Your shares, multiplied by that share value, equals your Weekly Revenue Share
Modern Weekly Revenue Pool
$27,000
Outstanding shares
100,000 shares
Share Value
$.27
Individual Weekly
Shares
$.27
2,400
Weekly
Revenue Share
$648

10. Breakdown of Revenue Share Earnings

11. So what is Revenue Share?
Each position has three levels: 100, 200, 300
We value the current team as experienced, and will start at 200 Level or higher
New Employees come in at 100 Level
Share increments will be earned at 100, 200, 300 values at 5 or 10 share increments depending on the position
Increasing share ranges allow for the range of earnings within a role to broaden as you progress through your career and to encourage movement to allow others the opportunity to advance as well.
You do not need to top out in your position to receive a promotion to another position
There’s not a defined path – your career is up to you
We want you to explore other areas of the restaurant

12. So what is Revenue Share?
Each level has a skill set requirement that will be completely transparent
It’s not only in your manager’s control, but your control
Ex. Barback will need to successfully complete: “Enlightened Hospitality 101”, “The Knowledge”, “Hi 101”, Bar Theory 101”, “Bar Practical 101”, “Modern Wine 101”, Manager Performance Review
If not an Event Server, but scheduled in the PDR, you will receive the share value associated with your primary job
If you are asked to work in a role that differs from your scheduled role, you will earn the share value associate with your scheduled role

13. So what is Revenue Share?
SHARE VALUES BY POSITION
Position
100 Level
200 Level
300 Level
Reservationist 35 40 45
Server Assistant 55 60 65
Barback
Barista
Server 90
100
110
Maitre D‘ 80
120
Sommelier
130
Bartender
Captain
You will notice new positions compared to what you are used to seeing in tip pool.
Maitre d’, Reservationists and Expeditors
We believe that they are integral contributors to your team’s success.
This is an example of one improvement over prior model – all those on your team will be able to share in the successes of a service.
We believe hospitality is a team sport and that all contributors should share in your wins.
Consider this – if you all work to become great trainers and mentors, you will be making money even when you are not here because your DNA will be fueling our guest experience!

14. Current Tip Pool Distribution
FOR INTERNAL USE ONLY
Current Tip Pool Distribution
$20
$0.00
Kitchen Staff
Reservations
Barista
Maitre D’
Expeditor
$0.20
Host
$0.40
Food Runner
$0.44
Server Assistant
$0.51
Barback
Support
$0.67
Server
$0.77
Bartender
$0.81
Sommelier
Captain

15. So what is Revenue Share?
How did we determine the Revenue Share percentage?
We knew we needed to keep the team whole
Starting with revenue, we worked backwards to determine a percentage that would both:
Keep the team whole week-over-week
Not drive menu prices so high as to discourage guests
Our final percentage, combined with shares and an increased hourly wage, kept the team neutral or better
Further clarification: We looked at what you earned as a team last week and including hourly pay, tips, spread of hours and OT and made our goal to keep you whole in the new model

16. So what is Revenue Share?
The Modern will begin with a total Revenue Sharing Pool of 13.5%
This is a smaller piece of a much a larger pie – Revenue includes increased menu prices in PDR, Bar Room, and Dining Room
This percentage is what it will take to keep the team even, and even better
There are things we can do as a team that can increase the Revenue Share Pool percentage
Overtime
If we achieve minimal impact to our guests and there’s room to increase prices, we could also increase the pool – either way a benefit to you
Take note that revenue share also combines into your base wage when you earn OT hours. The formula is complicated, but the gist is that not your OT rate is going to include your revenue share. That was not the case in a tipping system.
Note: PDR Admin is now in menu price, too.

17. What will this mean for our guests?
Our prices will increase across the board, but not evenly
The goal is to keep the change in total cost to our guests – given their current average gratuity – as minimal as possible
Price increases are item by item, with wine and beverage also priced differently and separately
In order to meet our short-term forecasts, we need to achieve revenue increase of at least 25%
We have thoroughly and exhaustively analyzed our menu mix and pricing.
In order for us to achieve success, we need to get revenue to a 25% increase. Menu price increases are limited, but our potential to affect revenue is not. This needs to be our focus.
Regarding the 25% increase to revenue, we already did some of this – and your revenue share pool has been modeled with this.

18. Additional Gratuity There will be no tip line our checks
If guests write any amount above the total, we will add it separately as additional gratuity. This will require a manager’s swipe
Tips left by chance will be paid out to all legally eligible positions, prorated by hour based on the assumption that lunch ends at 5pm daily, and starting with earliest call time

19. Keeping our FOH “whole”
We have a established a ground floor rate for each position based off of the average rate for your position on a monthly basis, using historical data that includes OT and all tips
Ground floor rates are different for December, January, and February
PTO was excluded to benefit you
We are guaranteeing you that hourly rate for each hour worked in each of those three months
At the end of the 12 weeks, if you did not achieve your ground floor over that period we will pay you the difference
We’ll be monitoring paychecks weekly, and meeting with you monthly
Remember that the reason we are doing this is to make all of your lives better.
When we talk of average earnings, take note that half were earning more and half were earning less.
We used the average and not the floor.

20. Keeping our FOH “whole”
Why are we doing this?
We believe that our model works in real life as well as it does in model-form, but we don’t think that risk should be borne by you
If necessary during these 12 weeks we will be fine-tuning the model in real-time to assure that we are keeping you whole as a team
Model is based on current conditions and the guest component and staffing levels might lead us to incremental improvements
By month three, we should be where we want to be and month four should be a smooth transition
We intend for you to make more than this rate. This is a floor based on an average, rather than the lowest rate, to show our commitment to you
Anything above this floor is yours. We hope and intend and deeply believe that our Revenue Sharing program will be a win for our team.

21. HI Check-ins We will sit down with each individual and share:
Where you are in the range
What your pay will look like
And we will learn:
How you want to grow
What’s your ideal schedule
What you prioritize most
Post
Know that we realize that each of you likely fit into 3 groups
One - Those of you who are excited to be a pioneer and are excited to share with your friends and family that you are part of this industry revolution
Two – Those of you who disagree with this entire approach and don’t think you can be a part of this journey
Three – Those of you who are not against it, but my heart is not in it fully it yet and need some time so see how things go
For those of you in that last category, our goal is to give you the information you need to make that decision
For those of you that are not interested in being an ambassador for success or disagree with this approach, we will want to support you in your transition away from the restaurant
And for those of you excited, our goal is to continue to fuel your fire and support you with the tools necessary to fuel others. We need your help.
We want to know where you land so that we know best how to support you. We will be asking for you to share where you are in your one on one meetings beginning on Friday.
We need you to help us shine the spotlight on this process in a way that inspires others to follow
And we need the team that can bring their full commitment and passion to this
This is what is right for our company and we are 100% committed and there is not option for failure

22. Questions? Open forum here
We will all stick around if there are additional questions that you didn’t get answered
Engage your Management Teams in a dialogue
Executive Committee “coffee talks” at each business
Continue submitting questions on inside.ushg
You can us directly! (likely will put question and answer on inside.ushg so others will learn from your question!)
Other ideas for how to keep the dialogue alive?

23. Hospitality Included Intro Thank you all for being here today.
One of the largest fear we have heard is a concern that we are robbing Peter to pay Paul and we want to acknowledge that fear.
The only reason we have embarked on this journey is to make the lives of all our people better than before.
There are 3 ways we want your lives to get better
We want you to feel better emotionally
We want you to grow financially
We want you to grow professionally and we want USHG to be a place where you can advance your career
And if we don’t do all of those things then we will have failed
We have analyzed and painfully cared for the model with that in mind.
What we are presenting to you today is the way we believe that we can make life better for our people and if we do not, we will fail.
Trust is a big part of this exchange
We have trusted you – USHG believes that we are the right team because they believe that we have what it takes to be pioneers
We have brought you in early even though we were advised not to and shared our intentions before details were confirmed
We have worked hard to professionalize our environment in the past few years, and we need to take the next step forward together
And now we ask for your trust