Leon bond invitation

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Folheto convite para investimento colaborativo na rede de fast food saudavel Leon na Inglaterra.

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Leon bond invitation

  1. 1. Leon BondsI n v i tat i o n D o c u m e n t
  2. 2. I M P O R TANT I N F O R MAT I ONThis Invitation Document is important and requires trading on any market. Investment in an unquotedyour immediate attention if you want to apply security of this nature, being an illiquid investment,for Leon Bonds. If you are in any doubt about is speculative and involves a degree of risk. It will notthe action you should take or the contents of this be possible to sell or realise Leon Bonds before theyInvitation Document, you should contact your mature or to obtain reliable information about thebank manager, solicitor, accountant, stockbroker risks to which they are exposed.or other professional adviser who is authorisedby the Financial Services Authority to conduct This Invitation Document, which is a financialinvestment business and who specialises in advising promotion for the purposes of Section 21 ofon investment in bonds, shares and other securities, FSMA, is issued by the Company which acceptsincluding unlisted securities. responsibility for the information contained herein. CONTENTS This Invitation Document has been approved as aThis Invitation Document is an invitation to apply financial promotion for UK publication by Reevesfor Leon Bonds, on the terms and conditions set which is authorised by the FSA to conduct investmentout in this Invitation Document and the Leon Bond business. Reeves is registered on the FSA’s RegisterInstrument (copies of which are available at with registered number 135202. Reeves is actingwww.leonrestaurants.co.uk/theleonbond), the exclusively for the Company in connection with theprincipal terms of which are set out on pages 6 to 7 issue of the Leon Bonds and no one else, and willof this Invitation Document. The Leon Bonds will be not regard any other person as its customer or benon-convertible, unsecured, non-transferable, and responsible to any other person for providing thewill provide investors with a return in the form of protections afforded to customers of Reeves or for£eon Pounds and quarterly prize draws. The Leon advising any such person in relation to the issue ofBonds will be repayable in three years’ time at the Leon Bonds. Introduction......................................................... 5option of Bondholders. Application should only be made on the basis of thisInvestment in the Leon Bonds involves certain risks. Invitation Document and the Leon Bond Instrument. About The Leon Bond........................................ 6For a discussion of the benefits and risks that should This Invitation Document does not constitute anbe considered in connection with an investment, offer of transferable securities to the public and How To Apply....................................................... 8please see the section headed “Risk Factors” on accordingly this Invitation Document does notpage 22 of this Invitation Document. The historical constitute a prospectus to which the Prospectus Rules How The Funds Will Be Used........................... 10performance of the Leon Group is no indicationof its future performance. The Leon Bonds are an of the FSA apply. Therefore, this Invitation Document and the Leon Bond Instrument have not been The Leon Team.................................................. 12unsecured debt of the Company and they may not approved by the Financial Services Authority or any Leon Financial Performance............................ 16be a suitable investment for all people receiving this other regulatory body. You should ensure that youInvitation Document. Prospective investors should read and understand all of this Invitation Document Your Questions Answered.................................. 18consider carefully whether an investment in the before applying for Leon Bonds.Leon Bonds is suitable for them in the light of their This Invitation Document does not constitute an The Legals.......................................................... 22personal circumstances. Investors should not apply offer to sell, or the solicitation of an offer to buy,for any Leon Bonds referred to in this Invitation Leon Bonds in any jurisdiction in which such Leon And Its Advisers........................................ 27Document, except on the basis of the information offer or solicitation is unlawful. The distributionpublished in this Invitation Document and the Leon of this Invitation Document in jurisdictions other Glossary............................................................... 29Bond Instrument. than the United Kingdom may be restricted byThe Leon Bonds are not shares and do not confer law and therefore persons into whose possessionany equity interest or voting rights in the equity of this Invitation Document comes should informany member of the Leon Group. themselves about and observe any such restriction. Any failure to comply with these restrictions mayLeon Bonds are not protected from loss by the constitute a violation of the securities laws of any suchFinancial Services Compensation Scheme. jurisdictions.Leon Bonds are not transferable or negotiable onany capital market and no application has or will bemade for Leon Bonds to be admitted to listing or 2 3
  3. 3. I NT R O D UCT I ONDear Club Member,There is something magical about fast food. As kids we were spellbound byit. John used to lie on his back and wave his arms and legs in the air withexcitement before his termly visit to McDonalds. But then we grew up andrealised that fast food makes you fall asleep and wake up fat.So, we asked ourselves: why can’t fast food be good food? Since we openedLeon we have been working to bring about a revolution in fast food that isfresh and full of flavour. We believe that people should be able to eat thisin any major city in the world.With your incredible support and loyalty we have thrived since we firstopened our Carnaby Street restaurant in July 2004. We are often sentmessages asking us to open new restaurants.When we came to thinking about how we will fund this growth we wantedto allow you to benefit from a return as well as the banks. So we thoughtthat we would see if people who ate with us would like to get involved inlending us the money to do so. A growing movement of customers andbusinesses are doing this.When we tested the water with approximately one quarter of our ClubMembers earlier this year, the response was extraordinary. We wereoverwhelmed by the number of people who said they would like to getinvolved – you can see some of their quotes on these pages.Given this response it is possible that the Bond will be subscribed aboveour £1.5 million target. In this case we will allocate the Bonds to those whoapplied earliest.This Invitation Document has been created using the input and questionsof those Club Members.Best wishes,Henry and JohnL EON CO - F OUN D E R S“The bond is a “Now we want a wholebrilliant idea! chain of them, please”It sums up what Ni g e l S l a t e rI love about Leon :)”L e o n Cl u b M e m b e r 5
  4. 4. ABOUT T H E L EON BON D In addition to the £eon Pounds you earn, every Leon Bond will be entered into a seasonal prize draw only available to Leon Bondholders. This Leon Bonds are essentially a very simple idea. will be drawn four times a year on the autumnal In exchange for taking up a Leon Bond, equinox, the winter solstice, the vernal equinox you will receive a return in the form of £eon and the summer solstice. The first prize draw will Pounds that can be used in Leon restaurants. be on 22nd September 2012. Each quarter there You will be able to buy food, drink, cookbooks will be at least ten prizes, for example: or anything else in any Leon. Your return in the form of £eon Pounds will be loaded • a place on Leon’s annual cookery school on onto electronic cards which can be used at the river Dart (including accommodation) our restaurants. You will also automatically be entered into a quarterly prize draw where • a place on week long courses at residential Th e R i v e r D a r t you could win other edible and non-edible cookery schools run by some of our friends rewards (see below). (at home as well as abroad) • hampers of food from artisanal British suppliers (from our suppliers or other Th e r e a r e t hr e e b o n d o p t i o n s producers we like) • a set of five sessions with our nutritionist The larger the denomination of the Leon Bond the higher the equivalent interest rate: You will be entitled to all of your investment back in full three years after the date of issue. (Subject1 invest £1,500 for three years and receive 120 £eon Pounds* each year – to our right to repay some or all of the Leon equivalent to a net 8% return or 10% gross return for the basic rate taxpayer Bonds early at any time. If we do this, we will pay2 invest £3,000 for three years and receive 300 £eon Pounds* each you back an additional 1% in £eon Pounds on year – equivalent to 10% net return or 12.5% gross return for your investment when we return the money.) Leon Cookery School the basic rate taxpayer After the first three years, on each anniversary of3 invest £5,000 for three years and receive 600 £eon the date the Leon Bonds are issued, you will be Pounds* each year – equivalent to a 12% net entitled to receive your investment back in full. Or return or 15% gross return for the basic rate you can choose to hold onto your Leon Bonds and taxpayer continue to receive your interest and rewards. Leon will make the necessary basic rate income “Great idea – power If you wish to invest more you can buy in multiples of any of these amounts up to a total tax payments due on the £eon Pounds return on to the people, not your investment in the Leon Bond – meaning that value of £10,000. there should be no additional liability for tax if the banks!” The response from those Club Members who we you are a basic rate UK income taxpayer. However, L EON C L UB MEMBE R sounded out on the idea suggested that the Leon all applicants who are or may be liable to tax, Bonds would be popular. It is possible the Bond especially higher rate taxpayers, should consult will be subscribed above our £1.5 million target. their own financial advisers as tax may be payable In this case we will allocate the Bonds to those who in some cases. applied earliest. * if you are an income tax payer. Corporate Bondholders will receive the gross amount and will be responsible for 6 7 paying their own corporation tax.
  5. 5. H O W TO A P P L YIf, after carefully reading this InvitationDocument, you want to apply pleasemake your application online here: “It is a miracle. Leon iswww.leonrestaurants.co.uk/ the Future.theleonbond It’s one of the rareYou can pay by debit card or banktransfer. You need to apply and pay by restaurants I haveno later than 5pm on 31st July 2012. encountered thatThe response from those Club Members actually makes sense.who we sounded out on the ideasuggested that the Leon Bonds would bepopular. If Leon has its way, and spreads across theYou will be advised in writing if yourapplication has been successful by 17th nation as widely as itAugust 2012 and, in the event that your deserves, we will soon beapplication has been successful, we willsend you a Leon Bond Certificate in much leaner, happier,respect of each of your Leon Bonds and cleaner, better peopleyour first £eon Pound cards. than we are at theIf your application is not successful orwe don’t raise enough to go ahead with moment.”the Leon Bonds, the amount paid by you Gil e s C o r e n , Th e Ti m e swould be repaid without interestand at your risk. 8 9
  6. 6. 1 O P EN I NG NE W L EON R E S TAU R ANT S AN DH O W T H E F UN D S W I L L BE U S E D C R EAT I NG JOB S T H R OUG H CA R E F U L G R O W T H Our current restaurants are trading more We started Leon eight years ago, with a vision to make it profitably than ever, despite the recession, easy for everybody to eat good food. and every week we get requests to open in There have always been three guiding principles behind new locations. that ambition: We hope to open at least ten restaurants • make food that tastes good and does you good over the next three years, creating over 200 • make our restaurants lovely, sunny places in which to eat UK jobs. We will do this carefully, doing food and to work, both through the physical design and everything we can to make sure that each through the way we treat each other and the people who restaurant is a huge success. eat with us We intend to continue to invest a lot • to create a business that is big and strong – that is of time in our menu as we open new sustainable, financially but also in terms of the way we restaurants to ensure that it remains fresh treat the people who work with us, the way we source and exciting. our food, the resources we use and the way in which we engage with the communities of which we are a part We want to continue to play our part in revitalising the British high street, These principles remain core to everything we do. We have come a long way since we opened our Carnaby designing restaurants that make sense in Street restaurant. We run thirteen thriving restaurants their local settings rather than having the (two operated by our franchise partner), we have shared one size fits all approach of many chains. a little of what we have learned through cookbooks that are published in Britain, France, Germany, Holland and America. We have helped found the not-for-profit 2 S ETT I NG U P T H E L EON F OUN D AT I ON Sustainable Restaurant Association (‘SRA’) and in 2012 Leon was awarded a two star sustainability champion rating. Ch e fs a t t h e S R A Our vision is to make it easy for everyone to eat good food. We are currently doing reception at 10 Downing Street this by serving fast food, but we believe that our expertise and contacts can be of use more broadly. So we are establishing the Leon Foundation, a not-for-profitWe want to use the money raised through the Leon Bond organisation with the same vision. The first step of the Leon Foundation is to set upto pursue our vision and fund two endeavours:- an annual summer cookery school with chef Mitch Tonks on the Dart in Devon for children with renal illnesses, who require a very specific diet. The children we will be 1 Op e n i n g n e w L e o n taking come from homes where very little or no primary cooking is done. r e s t a u r a n t s AN D c r e a t i n g j o b s t hr o u g h “The dream is to bring really good careful growth food at a good price to as many people as possible. It makes Leon 2 Setting up the sound like a new religion. If so, it’s Leon Foundation one that can count our judges as among its growing congregation ofW E W I L L A L S O P AY O F F A CONVE R T I B L E L OAN worshippers”To reduce our interest cost and maximise the cash we generate towards these twoendeavours, we will pay off a convertible loan of £300,000 from our shareholders. JAY R AYNE R , OB S E R VE R F OO DIn future we may use the money to set up Leon outside the UK. We may also choose MONT H L Y A W A R D Sto use a proportion of the money to reduce other borrowings but only where wefeel that money would not be better applied to opening new restaurants or toestablishing the Leon Foundation. 11
  7. 7. T H E L EON TEAM Brad Blum, Nick Evans, N o n - e x e c u t i v e D ir e c t o r c h a ir m a n Brad, who recently joined Leon, Nick joined Leon in 2008. After reading economics at Cambridge, is a highly regarded figure in he started his career working for Bain & Company overlapping with the U.S. restaurant industry. Henry and John, although they never met as Nick was busy founding He created dramatic growth Bain’s Hong Kong operations. After 5 entrepreneurial years in China,Henry Dimbleby, John Vincent, Simon Drysdale, and cultural change as CEO of India, Indonesia, Korea and the US – whilst loving Asia he foundC o - F o u n d e r & CEO Co-founder F i n a n c e D ir e c t o r the Italian chain Olive Garden, himself missing Europe and particularly Mediterranean food, so he where he achieved 33 consecutive returned to France where he completed an MBA between trips to the quarters of same-restaurant sales sea and mountains.Even before they met, Henry and John had both dreamed of Simon qualified as a chartered increases and built it into a highly Nick has serial experience in growing retail, leisure and consumerrevolutionising fast food. After studying physics and philoso- accountant with Ernst & Young, profitable $2.7 billion business by businesses/brands. He led investments in Brantano UK, AS Adventurephy at Oxford, Henry started his career as a commis chef London, in 1992. He immediately providing genuine Italian food and Cotswold Outdoor Ltd. He was a founding Partner at Net Fundwith the Michelin-starred chef Bruno Loubet (now of Bistrot transferred to Sydney, returning to – when he arrived there was no Europe, a Eu71.5m private equity fund. In 2003 he acquired aBruno Loubet on Clerkenwell Road), and used to bore on London four years later as a Senior olive oil in the menu. One of his significant stake and became the CEO at MW Group Ltd in Londonto friends working in other restaurants about his desire to Manager in the Banking and Capital favourite accomplishments was (a £70m retail group consisting of Mappin & Webb, Watches ofdemocratise good food. Markets Group. In 2003 he was able opening the Riserva di Fizzano Switzerland and TM Sutton) which he successfully returned to to merge his career with his copious restaurant in an 11th century profitability and sold to Baugur – the then owners of Goldsmiths.John was born with an entrepreneur’s restless energy. At coffee habit by joining Coffee Republic village in Italy where he flew his He currently divides his professional life between bicycles – asCambridge, he set up a production company and founded as Finance Director. Working with chefs to train. Chairman of Evans Cycles Ltd (who sell lovely bikes) and Chairmanan advertising agency with Richard Reed, one of the found- founder Bobby Hashemi he stabilised After Olive Garden he at Rapha Racing Ltd (who make beautiful bicycle clothing) – anders of Innocent Smoothies – and still managed to get in a the business and returned it to growth. orchestrated a major turnaround delicious fast food at Leon. He is a Partner at Active Private Equityfew history lectures. When he came to the job fair, the only at Burger King as CEO, reversing Advisory – a significant shareholder in Leon Restaurants. In early 2007 Simon met John andapplication form left was for Procter and Gamble. He got the the company’s downward sales Henry during the negotiations to selljob and soon found himself promoted to the launch of Max spiral and doubling profits by a Coffee Republic on Strand, whichFactor and Oil of Olay. But John loves to eat, and all the time introducing dishes built on became Leon’s fifth restaurant. Simonhe was selling make-up, he was quietly filling notebooks with its traditional (and healthier) joined Leon in July 2007 and hasthoughts on how to serve good fast food. “flame grilled” style. As CEO of helped the business grow to its current Romano’s Macaroni Grill, he led 13 restaurants. Simon is responsible forHenry, meanwhile, had given up his job as a chef – he lacked an initiative to improve the taste the unseen essentials of the business,the dexterity to make ornamental carrots – and joined the of the food while removing a total including finance, property, legal affairs of 42,000 calories from the menu,Daily Telegraph as a gossip columnist and occasional feature and the supply chain. reducing fat by 59% and sodiumwriter. From there he joined Bain & Company, one of the by 46%. Megan Bailey,top three global management consultancy firms, becoming a Sadly Simon has decided to leave the H e a d o f Br a n dsenior manager. Leon family at the end of the summer, After that, Brad founded BLUM having been offered the position of Enterprises, whose mission is Finance Director with Rex Restaurants, Megan started her adult life studying fine art in her home country ofA couple of years later John joined Bain too. While working to “provide good food for the France, before moving to the UK to do an MA in design. She wrotetogether they travelled all over the country. All they found to the owner of restaurants such as The planet” – food that tastes good, her thesis on how packaging design could help people share theireat on these trips was delicious but life-destroying fried chick- Wolseley on Piccadilly. The search to is good for you, makes you feel food and regenerate communal feasting. A stickler for function overen or cold neon-lit sandwiches. Infuriated by the difficulty of find his replacement is well advanced good, is good value and is good form, she likes making things feel precious and loved.finding tasty, nutritious food on the run, they resolved to do and we look forward to welcoming his for the environment. It is these She got a part-time bar job whilst studying and loved it – delvingsomething about it themselves. And so Leon – named after successor to the family soon. Simon will shared values, his friendship with into the world of wine, dining out culture and restaurant branding.John’s dad – was born. remain a shareholder and an avid Leon John, and a love for our food, She joined Leon as manager of Ludgate Circus “to help promote consumer. that attracted him to Leon. wholesome goodness” after eight straight years of dishing out alcohol. Brad spends his free time driving She was recently made Head of Brand. Her design sense, energy, love racing cars – in 2005 he was in of food, and deep understanding of Leon are a potent mix. the top ten at the 2005 Rolex 24 She loves food but can’t follow a recipe... so enjoys setting the table Hours of Daytona. We think he whilst others cook. looks a bit like Paul Newman. 12
  8. 8. T H E L EON TEAM James Lee-French, Nickie Bartsch, C o m m e r c i a l D ir e c t o r H e a d o f Tr a i n i n g James is responsible for making Nickie is the straight-talking Scot on the team. Like Glenn, she startedGlenn Edwards, Christopher “Toph” Ford, sure that all of our ingredients her life in hotels (she has a BA from Napier University in EdinburghOp e r a t i o n s D ir e c t o r Head of Food get to us at their best so they can no less). She joined us in 2006. She had eaten at Leon in SpitalfieldsGlenn started life in hotel management, before Toph is responsible for Leon’s food – for making get to you at their best. He was and loved the food and the energy – so she got in touch.a stint in the US persuaded him that food it taste good and doing you good. He creates new born in Yorkshire and has worked Starting as a manager at our Spitalfields restaurant, Nickie moved tobusinesses without accommodation were much dishes, tweaks old ones, and ensures the kitchens in food for ten years. Ludgate Circus before taking on all of the training across Leon earliermore fun. are able to produce them all to consistently high Before Leon, he worked with this year. standards. Simon at Coffee Republic andImmediately prior to coming to join us in the She drills our teams with an extraordinary combination of charismaspring of last year, Glenn had spent 11 years He got his love of food from his nan at an early age. then spent a stint at Cineworld – and iron-fisted discipline.working closely with Julian Metcalfe at Itsu. As She owned a café in the east end of London and where he was responsible, amongHead of Operations he grew the business from cooked amazing, simple British food. It was a secret other things, for buying over passion for most of his childhood, as he was sport £30 million worth of popcorn aone to 32 shops (from a revenue of £2 millionto over £30 million). He simplified kitchen mad and it all seemed a bit girly. year. He is methodical, detailed “After nearly 6 yearsoperations, designed new restaurants, and But he grew up and trained to be a professional and would walk a mile to save a few pennies. Nonetheless with Leon, I enjoyintroduced a training and development structure.He streamlined their supply chain. He also spent chef at Westminster College. Following spells in a number of restaurants, Toph took a degree in he likes the finer things in the food more now life, loves organising partiestwo years heading up their brand and fooddevelopment. Food Production, Development and Retailing at and understands the critical than I did when Bournemouth University, simultaneously setting upAt Leon he runs all of the restaurants as well a hotel café bar on the seafront with friends. difference between cost and value – essential for sourcing at Leon. I started,”as coordinating our marketing (together with He developed food for all sorts of people afterMegan, see above) and managing the relationship James is a keen cook – a “recipe Ni c k i e graduation – Marks & Spencer, Waitrose, Pizza follower, not a risk-taker”. Hewith our franchised restaurants. Hut and Debenhams among them – before joining lives in Stratford and has anHe is a very talented man in many areas. He is Leon in 2011. obsession with the Olympics andalso quite busy. the Westfield shopping centre that borders on the unhealthy. At Christmas he likes to work for charity and has worked for Crisis“I love the Leon value “I felt on joining Leon that and Shelter collecting donations,of blaming process I was coming home. Using working in homeless centres and helping out in the distributionand systems, not the quality, natural ingredients centre.people,” in simple yet flavour-Gl e n n packed food, with sparks of innovation and sunshine,” T o ph 14 15
  9. 9. S u m m a r y P r o fi t & L o ss A c c o u n t f o r Y e a rs E n d e d D e c e m b e rL EON F I NANC I A L P E R F O R MANCE 2008* 2009* 2010* 2011*Leon Restaurants Limited opened £ m illi o n sits first restaurant on Carnaby Street 14 £000 £000 £000 £000in 2004 and with the opening of the 12 Turnover 7,825 9,340 10,268 12,050King’s Cross restaurant in March 2012 10and Heathrow Terminal 3 in May 2012 Cost of Sales 2,379 2,970 2.956 3,404there are now 12 Leons across London 8 Gross Profit 5,446 6,369 7,312 8,647and one in the Bluewater shopping 6 Restaurant Operating 5,149 5,253 5,896 7,248centre in Kent. Leon Restaurants Costs 4Limited is the operating and parent Restaurant EBITDA 297 1,116 1,416 1,399company of Leon Naturally Fast Food 2plc which will issue the Leon Bond. 0 Administrative Expenses 870 833 1,005 957The following information shows that 2008 2009 2010 2011 S a l e s o v e r t h e L a s t 4 Y e a rs EBITDA (before (573)¹ 283 410 442this measured expansion has increased pre-opening costs)sales each year and has helped to 14improve the performance of the Leon Note 1: Before Exceptionals * Extracted from audited accounts supplemented with further details. 12Group. We have also seen sizeableimprovements in our cash generation 10since 2008. 8 You will see from the table below that the EBITDA before pre-opening costs for the period to May 2012 is over 3 times as much as for the same period last year. This isThe King’s Cross and Heathrow 6 partly due to the franchise deal that we agreed with HMSHost from which we wereTerminal 3 Leons were opened in 4 able to recognise a one-off benefit in 2012 of £185,000 in addition to the on-goingassociation with our new franchise fees from the franchised restaurants.partner, HMSHost, who are a transport 2location specialist operator and with 0 2008 2009 2010 2011 2012whom we intend to open a number of Unaudited Management Accounts Unaudited Management AccountsLeons in airports and train stations in Gr o w t h i n N u m b e r o f R e s t a u r a n t s 5 Months to May 2011 5 Months to May 2012the UK. We believe that by partnering fr o m 2 0 0 8 t o J u n e 2 0 1 2 £000 £000with the right franchisees who share Turnover 4,643 4,864our vision for quality, reasonably £ T H OU S AN D S Cost of Sales 1,378 1,299priced food produced quickly and 600ethically, we will grow the brand in a 400 Gross Profit 3,266 3,565responsible way that benefits you, the 200 Restaurant Operating 2,854 2,799people who eat with us, our suppliers, Costsand those who work with us, without 0 2008 2009 2010 2011 Restaurant EBITDA 412 766whom none of this would have been (200)possible. Administrative Expenses 311 443 (400)The tables to the right bear testament EBITDA (before 100 324 (600) pre-opening costs)to the success of our vision anddemonstrate, we believe, that you (800)can still be successful while caring EB I T D A * o v e r t h e L a s t 4 Y e a rsabout nutrition and operating in a * EBITDA stands for Earnings Before Interest Tax Depreciation and Amoritsation and is a good measure of cash flow generation.sustainable way. We’d love you to bea part of that and we hope thatyou would like to also. 16 17
  10. 10. YOU R Q UE S T I ON S AN S W E R E D What is the tax position? Would holding a Leon Bond meanWhy do you need the money? time, the Leon Bond is set up in such a way that we could raise more than the The £eon Pounds are taxable income that I have shares in Leon?We regularly get requests from our Club £1.5 million if we decided to. for income tax and, for corporate No. A bond represents a loan to aMembers to open new restaurants in Bondholders, corporation tax purposes. company not shares in a company.new areas so that is what we’d like to What happens if the bond is Leon is obliged to deduct basic rate Bonds are traditionally loans for a fixeddo in a careful and considered way. At undersubscribed? income tax at source for income tax period with a fixed rate of interest.the same time we will also establish the If we don’t raise what we feel we need, payers before crediting you with your Leon Bonds cannot be converted intonot-for-profit Leon Foundation, the first we will return your money to you. £eon Pounds. The net figures shown shares. Leon Bonds are not securedinitiative of which will be to set up an Unfortunately we won’t be able to pay in the summary of Bond options in on the assets of the company but areannual cookery school on the Dart for interest on any money we return to you the section “About the Leon Bond” are guaranteed by the parent company,children with renal problems and their but the response to date from Club what you will receive. For corporate Leon Restaurants Limited. This meansparents. We will also use a proportion Members has been so positive that we Leon Bondholders, as corporation if the Company is not in a position toof the money to reduce our borrowings. are confident we won’t have to do this. tax payers are wholly responsible redeem the Leon Bonds when it should,In future we may use the money to set for their own tax affairs, they will Leon will step into its shoes and redeemup Leon outside the UK. All of these How many Leon Bonds can I have? be credited £eon Pounds without the Leon Bonds (to the extent it isinitiatives will bring us closer to our You can apply for £10,000 of Leon deduction at source by Leon. The able). Further details of the guaranteevision of making it easy for everybody to Bonds in multiples of £1,500, £3,000 or gross figures shown in the summary of can be found at paragraph 13 of theeat good food. £5,000. Leon Bond options are what corporate section titled “Leon Bond Instrument”Why don’t you raise the money Bondholders will receive. on page 25. Can I change my mind?from the bank? What are the tax consequences for Yes, provided you do so by 14th AugustWe have approximately £1million in me as a Leon Bondholder? 2012. You have the right to contactbank funding but it is quite difficult to us to cancel your application at any We will make the necessaryraise funds from banks at the moment. time on or before 14th August 2012. arrangements to deduct tax at sourceWe think that this way of raising money If you contact us before then, we will for income tax payers at the basic ratemeans we can let some of the people refund your online payment by crossed of income tax – so you won’t have towho eat with us regularly get involved in cheque. If you wish to cancel your pay anything to the tax man if you are athe business and give them the benefits, application, you should write to us at basic rate income tax payer. Corporaterather than handing those benefits over Leon Restaurants Limited, St Margaret’s Bondholders will be responsible forto a bank. House, 18-20 Southwark Street, London the corporation tax payable on theirWhat happens if the bond is SE1 1TJ. £eon Pounds. In either case, we stronglyoversubscribed? recommend that all applicants who are or might be liable for tax, especiallyThe response from those members of higher rate income tax payers andthe club who we sounded out on the corporation tax payers, consult theiridea, suggested that the Leon Bonds own independent financial advisers aswould be popular. If people want to there may be some further tax payable.invest more than the £1.5 million wehad hoped to raise we will allocate theLeon Bonds on the basis of who lodgedtheir application first. At the same 18 19
  11. 11. YOU R Q UE S T I ON S AN S W E R E DWhen can I get my money out? of the redemption date. If you lose your Can I invest a smaller amount than Do I need to bank online to apply Leon Bond Certificate, let us know and the £1,500 bond? for a bond?You can get your investment back in we will either replace it or send you Sadly this is the smallest amount that No. Payment for Leon Bonds can be byfull after the initial term of three years, a form to use for redemption at the we can administer efficiently. We would debit card on a dedicated website or bywhich is the minimum commitment. appropriate time, subject to completion have loved to open up participation bank transfer.After that, and on each anniversaryof your initial application, you will be of an indemnity and payment of an more broadly. administration fee. Do I need to discuss this with anentitled to all of your investment back, Can I pay for the Leon Bond in independent financial adviser?without charges or deductions. Or you Can Leon redeem my Leoncan choose to hold onto your Leon instalments? We would strongly recommend you do Bonds?Bonds. Unfortunately, no. All Leon Bonds must so. We have the right to redeem some or all be paid for in full upon application.Can I sell or give my Leon Bond to of the Leon Bonds at any time (whether I still have more questions, howsomeone else? before or after the initial three-year I’d like to take up a £eon Bond so can I have them answered?No. Leon Bonds are designed to be a term). If we do this, we will pay you back what do I do next? If they concern your personal an additional 1% in £eon Pounds onpersonal investment and therefore are Please fill in the online application investment portfolio, you should the funds you invested when we returnnot transferable. However, you can give at www.leonrestaurants.co.uk/ put them to your own independent the money.your £eon Pounds to any one you love. theleonbond, and pay no later than financial adviser. If they concernTo make it easier for you, £eon Pound Is the rate of return fixed? 5pm on 31st July 2012. You will be the terms of the Leon Bond itselfCards will be pre-loaded with either 50 advised in writing of acceptance of your please email us at theleonbond@ Yes. No matter how long your funds£eon Pounds or 20 £eon Pounds. We Leon Bond application no later than leonrestaurants.co.uk. We will remain invested in your Leon Bonds thewill send you the relevant number of 17th August 2012 and your first full endeavour to respond within 48 hours rate of return will not change.£eon Pound Cards to make sure you year’s worth of £eon Pounds and a Leon of receipt.receive all the £eon Pounds which you When will I start to get my £eon Bond Certificate will be sent at the sameare entitled to. Pounds and how often? time.What happens if I die while I hold You will be sent your first full year’s worth of £eon Pounds by 17th Augusta Leon Bond? 2012 for the period beginning 1stIt is a terrible thought, but of course August 2012. You will then receive ayour estate could redeem your Leon further full year’s worth of £eon PoundsBond early. on 1st August in each year you hold the Leon Bond.How do I redeem my Leon Bond?You simply complete the Notice of Can my company invest to giveRedemption on the reverse of your £eon Pounds to people who workLeon Bond Certificate and send it to for us?us six months prior to the redemption Yes, you can invest as a company or as adate (being the end of the three-year person.initial term, namely 31st July 2015, orany anniversary thereafter). We willdespatch the payment within seven days 20 21
  12. 12. T H E L EGA L SA. ISK FACTORS YOU SHOULD R Financial Services Compensation Scheme The market Instrument and that, accordingly, no member Company’s liability for fraud. Despatch of Leon Bond Certificates and initial KNOW ABOUT Leon Bonds are not covered by the Financial Leon faces competition from other restaurants of the Leon Group or their respective directors, £eon Pounds Cards by Friday 17th August 2012 Services Compensation Scheme. and food shops and, as a result, we could be officers, agents, employees or advisers or any MONEY LAUNDERINGIn addition to the other information in this affected by the competitive pressures that person acting on behalf of any of them shallInvitation, you should consider the following It is also a term of any application that the result. It is possible that recessionary pressures have any responsibility for any such otherspecific factors carefully when deciding Company or Neville Registrars Limited may, E. THE LEON BOND INSTRUMENT and other economic factors (such as rising information or representation;whether or not to invest in Leon Bonds. If Bondholders should seek their own tax advice in their absolute discretion, require verification interest rates, tax increases and falling house The Leon Bonds are constituted by, and willyou are in any doubt about the contents of this of an applicant’s identity to the extent that an Bondholders should seek their own tax advice prices) may decrease the disposable income that • you are not relying on any member of the Leon be issued subject to and with the benefit of theInvitation or the action you should take, you are applicant has not already provided the same. as to the consequences of owning Leon Bonds customers have available to spend on eating out Group or Reeves to advise whether or not Leon Leon Bond Instrument. Bondholders will bestrongly recommended to consult a professional Pending the provision of evidence of identity, as well as receiving returns from them. No and/or adversely affect customers’ confidence Bonds are a suitable investment for you; bound by all the terms and conditions set outadviser authorised under FSMA who specialises Leon Bonds applied for hereunder may not be representation or warranty, express or implied, is and willingness to spend. This could lead to a in the Leon Bond Instrument. The terms andin advising on investments in bonds, shares and issued at the absolute discretion of the Company given to Bondholders as to the tax consequences reduction in our revenues. conditions attached to the Leon Bonds are setother securities. • you are either (i) an individual who is 18 or Neville Registrars Limited. If within a of their acquiring, owning or disposing of Leon out below. years old or more at the date of making your reasonable time after a request for verification Bonds and no member of the Leon Group will The foregoing factors are not exhaustive, and application and who is resident in the UK; or (ii)An investment in Leon Bonds is speculative and of identity, satisfactory evidence has not been be responsible for any such tax consequences. do not purport to be a complete explanation a company resident in the UK for corporation 1. Definitions and Interpretationinvolves a degree of risk. You should be aware supplied, the Company may, at its absolutethat you may not realise your initial investment. of all the risks and significant considerations tax purposes and which is not prevented by discretion, terminate an application in which In the Leon Bond Instrument, in addition to theThe Company believes the following risks are Interest rate and inflationary risk involved in investing in the Leon Bonds. the laws of its governing jurisdiction or place event, any subscription monies will be returned terms contained in the glossary of page 29 of thisthe most significant for potential investors. Leon Bonds are three year unsecured fixed rate Accordingly and as noted above, additional of incorporation from applying for or holding to the applicant without interest and at your risk. Invitation Document, the following expressionsThese risks do not necessarily comprise all obligations and as such will not benefit from risks and uncertainties not presently known to Leon Bonds; have the following meanings, except where thethose associated with an investment in Leon any subsequent increases in market interest the Company or the Company currently deem JURISDICTION context otherwise requires:Bonds and are not intended to be presented in rates. Similarly, if retail selling prices increase immaterial, may also have an adverse effect on • you are entitled to make your application and the Company’s prospects. The making of applications, acceptances ofany assumed order or priority. In particular, the purchasing power of £eon Pounds may be to be issued with Leon Bonds in respect thereof “Business Day” a day other than a Saturday or applications and contracts resulting therefromthe performance of the Leon Group may be reduced. under the laws and rules of any governmental a Sunday on which banks are open for business under this Invitation shall be governed by andaffected by changes in legal, regulatory and tax B. TERMS AND CONDITIONS bodies located in any jurisdictions which apply in London; construed in accordance with English law andrequirements in the UK as well as overall global to you; Death of a bondholder This Invitation and/or your participation in the the parties submit to the exclusive jurisdictionfinancial conditions. In the case of death of a Bondholder or of any application of Leon Bonds is conditional upon of the English courts. “Default Event” has the meaning given to that and subject to: • you are aware that it is your responsibility to term in paragraph 6.1;Non-transferable (save on death) other event giving rise to the transmission seek advice from someone who specialises in of Leon Bonds by operation of law, the advising on investments; C. THE APPLICATION PROCESSLeon Bonds cannot be transferred (save for only persons recognised by the Company as • the Company having received applications “Directors” the board of directors of thetransmission on death) and no application will If, after carefully reading this Invitation having any title to such Leon Bonds of such from potential investors for subscription of Document, you wish to make an application Company from time to time;be made for the Leon Bonds to be admitted Bondholder are the executors or administrators Leon Bonds amounting to, in aggregate, not • you are not entitled to be paid any commissionto listing or trading on any capital market. It in relation to your application; please go to www.leonrestaurants.co.uk/ of that deceased Bondholder’s estate or such less than £500,000 (or such lesser amount as the theleonbond and fill in your details. You can “Extraordinary Resolution” a resolutionmay not be possible for a Bondholder to obtain other person or persons as the directors of the Company may decide in its absolute discretion) pay by debit card or bank transfer. You need passed at a meeting of the Leon Bondholdersreliable information about the risks to which Company may reasonably determine. Any by not later than 5pm on 31st July 2012; • all certificates, documents and monies sent to apply and pay by no later than 5pm on 31st duly convened and passed by a majorityLeon Bonds are exposed. person becoming entitled to Leon Bonds as a to you by or on behalf of the Company or any July 2012. consisting of not less than three-fourths of the result of such transmission may, upon producing • your online application being submitted documents or monies you send to the Company votes cast, whether on a show of hands or onUse of proceeds by other companies such evidence as reasonably required by the are sent at your risk; Please note that the decision to accept your together and matched with online payment by a poll; directors of the Company, be registered as the application (in multiples of £1,500, £3,000The proceeds from the Leon Bonds may be not later than 5pm on 31st July 2012; and holder of such Leon Bonds and such person will or £5,000 Leon Bonds up to a maximum ofinvested or loaned to other companies within • you and funds under your management are not £10,000) is at the sole and unreserved discretion “£eon Pound Card” the prepayment cardthe Leon Group. For example, a sister company also be entitled to require the early redemption • the Company having accepted your application engaged in money laundering; of the Company. Therefore, the Company may issued by Leon to be loaded with £eon Poundsmay be established to launch Leon in America of the Leon Bonds. in whole or in part (up to a maximum value accept your application in respect of part only of for future purchases of Leon goods and services;or expand the Leon franchising wing. of £10,000) in multiples of £1,500, £3,000 or • you are making your application on your own the Leon Bonds applied for in your application £eon Pounds £5,000 Leon Bonds. behalf and for no other person; (in which case the balance of the amount paid “Leon Return” subject to paragraph 3.2:No certainty of repayment The return due on the Leon Bonds will be paid by you in respect of Leon Bonds which were notThe Leon Bonds will be an unsecured debt of in £eon Pounds. £eon Pounds will be held by You have the right to contact us to cancel your • the Company, their representative members, issued to you would be repaid to you without (a) 120 £eon Pounds (if you are a personalthe Company and will rank behind any secured Bondholders in accordance with the terms and application at any time on or before 14th August directors, employees, agents and advisers interest at your risk). Bondholder) or 150 £eon Pounds (if you are abank borrowings of the Leon Group. There is no conditions of the £eon Pounds (which will be 2012. If you contact us before then, we will will rely upon the truth and accuracy or You will be advised in writing if your corporate Bondholder) in advance per annum,certainty or guarantee that the Company and/or available on our website in due course) and may refund your online payment by crossed cheque. the confirmations, acknowledgements and application has been successful by 17th August if the principal amount of the Leon Bond isLeon Restaurants Limited (who is acting as the be applied against the total cost of any purchase If you wish to cancel your application, you representations contained in this Invitation 2012 and, in the event that your application £1,500;Company’s guarantor) will be able to repay the at Leon Restaurants – food, books or anything should write to us at Leon Restaurants Limited, Document and the application; has been successful we will send you a LeonLeon Bonds. If the Company is not in a position else. The £eon Pounds will be credited and sent St Margaret’s House, 18-20 Southwark Street, Bond Certificate in respect of each of your Leon to Bondholders by first class mail on 1st August London SE1 1TJ. (b) 300 £eon Pounds (if you are a personalto redeem the Leon Bonds when it should, Leon • your application is in English and the Leon Bonds. of each year. £eon Pounds expire five years Bondholder) or 375 £eon Pounds (if you are awill step into its shoes and redeem the Leon Group will only write and communicate with If your application is not successful or we don’t after they are issued. corporate Bondholder) in advance per annum,Bonds (to the extent it is able). If the Company, You will be making your application on the you in English; raise enough to go ahead with the Leon Bonds, if the principal amount of the Leon Bond isLeon Restaurants Limited or any other member terms and conditions contained in this Invitation the amount paid by you would be repaid without £3,000; andof the Leon Group were to become insolvent, Prize draws Document and the Leon Bond Instrument. In • you have no access to any out-of-court interest and at your risk.there is a risk that some or all of the Leon Bonds Bondholders will automatically be entered into particular, by making your application, you will complaint or redress mechanism in relation towill not be repaid and also a risk that some or be deemed to acknowledge and confirm that: (c) 600 £eon Pounds (if you are a personal free seasonal prize draws. The prize draws your application; andall of the return due on the Leon Bonds will not Bondholder) or 750 £eon Pounds (if you are a will be held in accordance with the prize draw D. EXPECTED TIMETABLE OFbe paid. corporate Bondholder) in advance per annum, terms and conditions (which are available on • you are not relying on any information given • the Company accepts no liability for any PRINCIPAL EVENTS if the principal amount of the Leon Bond is our website). The Company reserves the right or any representations, warranties, agreements inaccuracies in your application or for any late Publication of this Invitation Document: £5,000;Suitability to amend or vary the prize draw terms and or undertakings (express or implied), written or failed delivery of your application. Monday 25th June 2012Leon Bonds may not be a suitable investment conditions. or oral, or statements made at any time by any member of the Leon Group in relation Latest time and date for receipt of a completed “Outstanding Amount” the aggregatefor everyone. Nothing in this Invitation Document, the Leon application and online payment: 5pm on to the Leon Group other than as contained in principal amount of the Leon Bonds outstanding Bond Instrument or application will restrict the Tuesday 31st July 2012 at any time; this Invitation Document and the Leon Bond 22 23

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