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EXHIBIT 1.01
TERMS AGREEMENT
May 24, 2001
Salomon Smith Barney Holdings Inc.
388 Greenwich Street
New York, New York 10013
Attention: Treasurer
Dear Sirs:
We understand that Salomon Smith Barney Holdings Inc., a New York
corporation (the "Company"), proposes to issue and sell $22,500,000 aggregate
principal amount of its Equity Linked Securities (ELKS?) (2,250,000 ELKS) based
upon the common stock of Juniper Networks, Inc. due May 31, 2002 (the
"Securities"). Subject to the terms and conditions set forth herein or
incorporated by reference herein, Salomon Smith Barney Inc. (the "Underwriter")
offers to purchase 2,250,000 Securities in the principal amount of $22,500,000
at 97.50% of the principal amount. The Closing Date shall be May 30, 2001 at
9:00 a.m. at the offices of Cleary, Gottlieb, Steen & Hamilton, One Liberty
Plaza, New York, New York 10006.
The Securities shall have the following terms:
Title: Equity Linked Securities (ELKS?) based upon the
Common Stock of Juniper Networks, Inc. due May 31,
2002
Maturity: May 31, 2002
Coupon: Each ELKS will pay a total coupon of $1.6044 in
cash in two separate semi-annual installments
payable in part on each of two separate Interest
Payment Dates. The first coupon of $0.8000 will be
composed of $0.2025 of interest and a partial
payment of an option premium in the amount of
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$0.5975. The second coupon of $0.8044 will be
composed of $0.2036 of interest and a partial
payment of an option premium in the amount of
$0.6008.
Maturity Payment: Holders of the ELKS will be entitled to receive at
maturity the Maturity Payment (as defined in the
Prospectus Supplement dated May 24, 2001 relating
to the Securities)
Interest Payment Dates: November 30, 2001 and May 31, 2002
Regular Record Dates: November 29, 2001 and May 30, 2002
Initial Price To Public: 100% of the principal amount thereof, plus accrued
interest from May 30, 2001 to date of payment and
delivery
Redemption Provisions: The Securities are not redeemable by the Company
prior to maturity.
Trustee: The Bank of New York
Indenture: Indenture, dated as of October 27, 1993, as
amended from time to time
All the provisions contained in the document entitled "Salomon Smith Barney
Holdings Inc. - Debt Securities - Underwriting Agreement Basic Provisions" and
dated December 1, 1997 (the "Basic Provisions"), a copy of which you have
previously received, are, except as indicated below, 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.
Basic Provisions varied with respect to this Terms Agreement:
(A) Notwithstanding the provisions set forth in Section 3 of the Basic
Provisions, the Company and the Underwriter hereby agree that the
Securities will be in the form of Book-Entry Notes and shall be delivered
on May 30, 2001 against payment of the purchase price to the Company by
wire transfer in immediately
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available funds to such accounts with such financial institutions as the
Company may direct.
(B) Paragraph 4(j) of the Basic Provisions shall be amended and restated as
follows: "The Company will not, without the consent of Salomon Smith Barney
Inc., offer, sell, contract to offer or sell or otherwise dispose of any
securities, including any backup undertaking for such securities, of the
Company, in each case that are substantially similar to the Securities or
any security convertible into or exchangeable for the ELKS or such
substantially similar securities, during the period beginning the date of
the Terms Agreement and ending the Closing Date."
(C) Paragraph 5(g) of the Basic Provisions shall be amended and restated as
follows: "You shall have received on the Closing Date letters from
PricewaterhouseCoopers LLP and KPMG LLP covering the matters set forth in
Exhibit II hereto, with respect to the Registration Statement and the
Prospectus at the time of the Terms Agreement."
The Underwriter hereby agrees in connection with the underwriting of the
Securities to comply with the requirements set forth in any applicable sections
of Section 2720 to the By-Laws of the National Association of Securities
Dealers, Inc.
Marcy Engel, Esq., is counsel to the Company. Cleary, Gottlieb, Steen &
Hamilton is counsel to the Underwriter. Cleary, Gottlieb, Steen & Hamilton is
special tax counsel to the Company.
Please accept this offer no later than 9:00 p.m. on May 24, 2001, 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:
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"We hereby accept your offer, set forth in the Terms Agreement, dated May
24, 2001, to purchase the Securities on the terms set forth therein."
Very truly yours,
SALOMON SMITH BARNEY INC.
By: /s/ Ramesh Menon
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Name: Ramesh Menon
Title: Managing Director
ACCEPTED:
SALOMON SMITH BARNEY HOLDINGS INC.
By: /s/ Mark Kleinman
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Name: Mark Kleinman
Title: Executive Vice President and Treasurer
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