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

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

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.

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

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

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.

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 $14 - 18 Line Cook Butcher $14 – 22 Garde Manger $12 - 14 Intern $11 - 12 Prep Cook $11 – 13 Porter Receiver $11 - 13

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

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

Breakdown of Revenue Share Earnings

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

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

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!

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

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

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.

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.

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

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.

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.

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

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 email 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?

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