That's always been my understanding as well. I always add an extra 10% or so to the tip I would have given otherwise. (Er, extra 10% of the bill, not 10% of the tip.)
We eat at similar retaurants here, and if the chef is especially entertaining, we will tip the chef separately. We are a family of 4 and usually we tip $1 per person or if we have no singles, he gets a 5!
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