Exhibit 1.02
TERMS AGREEMENT
June 11, 1997
Travelers Group Inc.
388 Greenwich Street
New York, New York 10013
Attention: Deputy Treasurer
Dear Sirs:
We, the undersigned, in our capacity as the several underwriters named
herein (the "Underwriters"), understand that Travelers Group Inc., a Delaware
corporation (the "Company"), proposes to sell 8,000,000 Depositary Shares (the
"Firm Securities"), each representing a 1/5th interest in a share of a series of
its 6.365% Cumulative Preferred Stock, Series F, par value $1.00 per share.
Subject to the terms and conditions set forth herein or incorporated
by reference herein, the Underwriters offer to purchase, severally and not
jointly, the number of shares of Firm Securities set forth opposite their
respective names on the list attached hereto at a purchase price of $49.00 per
share, plus accrued dividends, if any, from June 16, 1997 to the date of payment
and delivery.
The Depositary Shares will be issued by BankBoston N.A. (the
"Depositary") pursuant to the terms of a Deposit Agreement dated as of June 11,
1997 among the Company, BankBoston N.A., as Depositary, and the holders from
time to time of the Firm Securities.
The Firm Closing Date shall be June 16, 1997 at 9:00 A.M. New York
City time at the offices of the Company, 388 Greenwich Street, New York, New
York 10013.
The Underlying Preferred Shares shall have the following terms:
Title: 6.365% Cumulative Preferred Stock, Series F
Dividend Rate: 6.365% per annum
Dividend Payment
Dates: March 1, June 1, September 1 and December 1,
commencing September 1, 1997; dividends accrue
from June 16, 1997
Record Dates: As determined in advance by the Board of Directors
of the Company, to be not more than 60 days nor
less than 10 days before the respective Dividend
Payment Date
Stated Value: $250.00 per share
Liquidation Preference: $250.00 per share
Redemption
Provisions: The Underlying Preferred Shares may be redeemed,
at the option of the Company, on or after June 16,
2007, in whole or in part, upon not less than 30
days' nor more than 90 days' prior notice, at a
redemption price of $250.00 per share, plus
accrued and accumulated but unpaid dividends to
but excluding the redemption date. The Underlying
Preferred Shares shall not be subject to any
mandatory redemption, pursuant to a sinking fund
or otherwise.
Voting Rights: None, except as described in the Certificate of
Designation
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of 6.365% Cumulative Preferred Stock, Series F, of
Travelers Group Inc., dated June 11, 1997 (the
"Certificate of Designation").
Additional terms: If, prior to 18 months after the date of the
original issuance of the Underlying Preferred
Shares, one or more amendments to the Internal
Revenue Code of 1986, as amended (the "Code"), are
enacted that reduce the percentage of the
dividends-received deduction (currently 70%) as
specified in Section 243(a)(1) of the Code or any
successor provision, certain adjustments may be
made in respect of the dividends payable by the
Company, and Post Declaration Date Dividends and
Retroactive Dividends (as such terms are defined
in the Certificate of Designation) may become
payable, as provided for in the Certificate of
Designation.
Both the Firm Securities and the Underlying
Preferred Shares will be initially represented by
one or more global securities registered in the
name of The Depository Trust Company ("DTC") or
its nominee. Beneficial interests in the Firm
Securities and the Underlying Preferred Shares
will be shown on, and transfers thereof will be
effected only through, records maintained by DTC
and its participants. Owners of
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beneficial interests in the Firm Securities and
the Underlying Preferred Shares will be entitled
to physical delivery of securities in certificated
form only under the limited circumstances
described in the Company's Prospectus Supplement
dated June 11, 1997.
The initial price to the public of the Depositary Shares shall be
$50.00 per Depositary Share, plus accrued dividends, if any, from June 16, 1997
to the date of payment and delivery.
All the provisions contained in the document entitled "Travelers Group
Inc.--Preferred Stock and Depositary Shares--Underwriting Agreement Basic
Provisions" and dated May 22, 1997 (the "Basic Provisions"), a copy of which you
have previously received, are herein incorporated by reference in their entirety
and shall be deemed to be a part of this Terms Agreement to the same extent as
if the Basic Provisions had been set forth in full herein. Terms defined in the
Basic Provisions are used herein as therein defined.
Charles O. Prince, III is counsel to the Company. Dewey Ballantine is
counsel to the Underwriters.
The Underwriters shall not have an option to purchase any Additional
Securities.
The Firm Securities will be made available for checking and packaging
at the designated office of BankBoston N.A., at least 24 hours prior to the
Closing Date.
The Company will use its best efforts to cause an application for
listing of the Firm Securities on the New York Stock Exchange to be approved.
The Underwriters are not authorized to solicit offers to purchase any
of the Firm Securities as Contract Securities pursuant to Delayed Delivery
Contracts.
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The Underwriters hereby agree in connection with the underwriting of
the Firm Securities to comply with the requirements set forth in any applicable
sections of Rule 2720 of the Conduct Rules of the National Association of
Securities Dealers, Inc.
Please accept this offer no later than 9:00 o'clock P.M. on June 11,
1997 by signing a copy of this Terms Agreement in the space set forth below and
returning the signed copy to us, or by sending us a written acceptance in the
following form:
"We hereby accept your offer, set forth in the Terms Agreement,
dated June 11, 1997 to purchase the Firm Securities on the terms set forth
therein."
Very truly yours,
SMITH BARNEY INC.
LEHMAN BROTHERS INC.
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
As Underwriters
By SMITH BARNEY INC.
By: /s/ ROBERT H.B. BALDWIN, JR.
-------------------------------
Name: Robert H.B. Baldwin, Jr.
Title: Managing Director
ACCEPTED:
TRAVELERS GROUP INC.
By: /s/ FIROZ B. TARAPORE
--------------------------------
Name: Firoz B. Tarapore
Title: Deputy Treasurer
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Number of
Shares of
Underwriter Firm Securities
- ----------- ---------------
Smith Barney Inc. . . . . . . . . . . . . . . . . 2,000,000
Lehman Brothers Inc. . . . . . . . . . . . . . . 2,000,000
Merrill Lynch, Pierce,
Fenner & Smith Incorporated . . . . . . . . . . 2,000,000
Morgan Stanley & Co. Incorporated . . . . . . . . 2,000,000
---------
Total . . . . . . . . . . . . . . . . . . . . 8,000,000
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