Exhibit 1.01
TERMS AGREEMENT
August 19, 2002
Citigroup Inc.
399 Park Avenue
New York, New York 10043
Attention: Assistant Treasurer
Ladies and Gentlemen:
We understand that Citigroup Inc., a Delaware corporation (the "Company"),
proposes to issue and sell $1,000,000,000 aggregate principal amount of its debt
securities (the "Securities"). Subject to the terms and conditions set forth
herein or incorporated by reference herein, we, as underwriters (the
"Underwriters"), offer to purchase, severally and not jointly, the principal
amount of the Securities set forth opposite our respective names on the list
attached as Annex A hereto at 98.859% of the principal amount thereof, plus
accrued interest, if any, from the date of issuance. The Closing Date shall be
August 26, 2002, at 8:30 A.M. at the Corporate Law offices of the Company
located at 425 Park Avenue, New York, New York 10043. The Securities shall have
the following terms:
Title: ............................................. 5.625% Subordinated Notes due 2012
Maturity: .......................................... August 27, 2012
Interest Rate: ..................................... 5.625% per annum
Interest Payment Dates: ............................ February 27 and August 27, commencing February 27, 2003
Initial Price to Public: ........................... 99.284% of the principal amount thereof, plus
accrued interest, if any, from the date of issuance
Redemption Provisions: ............................. The Securities are not redeemable by the Company prior to
maturity, except upon the occurrence of certain events
involving United States taxation, as set forth in the
Prospectus Supplement, dated August 19, 2002, to the
Prospectus, dated March 30, 2001.
Record Date: ....................................... The February 15 or August 15 preceding each Interest Payment
Date
Additional Terms:
The Securities shall be issuable as Registered Securities only. The
Securities will be initially represented by one or more global Securities
registered in the name of The Depository Trust Company ("DTC"), the Euroclear
System and Clearstream Banking, societe anonyme, or their respective nominees,
as described in the Prospectus Supplement relating to the Securities. Beneficial
interests in the Securities will be shown on, and transfers thereof will be
effected only through, records maintained by such entities and their respective
participants. Owners of beneficial interests in the Securities will be entitled
to physical delivery of Securities in certificated form only under the limited
circumstances described in the Prospectus Supplement. Principal and interest on
the Securities shall be payable in United States dollars. All provisions of
Article Eleven of the Indenture relating to defeasance shall apply to the
Securities.
All the provisions contained in the document entitled "Primerica
Corporation-Debt Securities -- Underwriting Agreement -- Basic Provisions" and
dated January 12, 1993 (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) all references to Primerica Corporation and Travelers Group Inc.
shall refer to Citigroup Inc.;
(b) in the thirteenth line of the first paragraph, delete "March 15,
1987, between Primerica Corporation, a New Jersey corporation formerly
known as American Can Company ("old Primerica"), and The Bank of New York,
as trustee (such trustee or such other trustee as may be named for the
Securities, being hereinafter referred to as the "Trustee"), as amended by
the First Supplemental Indenture dated as of December 15, 1988, among old
Primerica, Primerica Holdings, Inc., a Delaware corporation ("Holdings")
and the Trustee, the Second Supplemental Indenture dated as of January 31,
1991 between Holdings and the Trustee, and the Third Supplemental Indenture
dated as of December 9, 1992 among the "Company, Holdings and the Trustee"
and insert in lieu thereof "April 12, 2001, between Citigroup Inc., a
Delaware corporation, and Bank One Trust Company, N.A., as trustee (such
trustee or such other trustee as may be named for the Securities, being
hereinafter referred to as the "Trustee")";
(c) in the second line of Section 2(a), delete "(33-55542), including
a prospectus" and insert in lieu thereof "(333-57364), including a
prospectus" and any reference in the Basic Provisions to the "Registration
Statement" shall be deemed to be a reference to such registration statement
on Form S-3;
(d) in the third paragraph of Section 3, delete the phrase "certified
or official bank check or checks in New York Clearing House (next day)" and
insert in lieu thereof "wire transfer of federal or other same day";
(e) in the fifth paragraph of Section 3, delete the phrase "certified
or official bank check in New York Clearing House (next day)" and insert in
lieu thereof "wire transfer of federal or other same day";
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(f) in the fourteenth line of the third paragraph of Section 3, delete
the word "definitive" and insert in lieu thereof "global";
(g) in the fifth line of Section 5(f), delete the phrase "or
accounting officer" and insert in lieu thereof "officer, principal
accounting officer or any deputy controller";
(h) in the ninth line of Section 6(a), delete "such registration
statement when it became effective, or in the Registration Statement," and
insert in lieu thereof "the Registration Statement";
(i) In the eighth line of Section 6(b), delete "in any part of such
registration statement when it became effective, or in the Registration
Statement," and insert in lieu thereof "the Registration Statement"; and
(j) in the sixth line of Section 10, delete "65 East 55th Street, New
York, New York 10022," and insert in lieu thereof "399 Park Avenue, New
York, New York 10043."
The Company agrees to use its best efforts to have the Securities
approved for listing on the Luxembourg Stock Exchange.
The Underwriters hereby agree in connection with the underwriting of
the 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. Each Underwriter further agrees and hereby represents
that:
(a) it has not offered or sold, and, prior to the expiration of the
period of six months from the Closing Date for the issuance of the notes,
will not offer or sell any Securities to persons in the United Kingdom,
except to those persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments, as principal or
agent, for the purposes of their businesses or otherwise in circumstances
that do not constitute an offer to the public in the United Kingdom for the
purposes of the Public Offers of Securities Regulations 1995, as amended
(the "Regulations");
(b) it has complied and will comply with all applicable provisions of
the Financial Services and Markets Act 2000 ("FSMA"), with respect to
anything done by it in relation to the Securities in, from or otherwise
involving the United Kingdom; (c) it has only communicated or caused to be
communicated and it will only communicate or cause to be communicated an
invitation or inducement to engage in investment activity (within the
meaning of Section 21 of FSMA) received by it in connection with the issue
or sale of the notes in circumstances in which Section 21(1) of FSMA does
not apply to Citigroup;
(d) it will not offer or sell any Securities directly or indirectly in
Japan or to, or for the benefit of any Japanese person or to others, for
re-offering or re-sale directly or indirectly in Japan or to any Japanese
person except under circumstances which will result in compliance with all
applicable laws, regulations and guidelines promulgated by the relevant
governmental and regulatory authorities in effect at the relevant time. For
purposes of this paragraph, "Japanese person" means any person resident in
Japan, including any corporation or other entity organized under the laws
of Japan;
(e) it is aware of the fact that no German selling prospectus
(Verkaufsprospekt) has been or will be published in respect of the sale of
the Securities and that it will comply with
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the Securities Selling Prospectus Act (the "SSPA") of the Federal Republic
of Germany (Wertpapier-Verkaufsprospektgesetz). In particular, each
underwriter has undertaken not to engage in public offering (offentliche
Anbieten) in the Federal Republic of Germany with respect to any Securities
otherwise than in accordance with the SSPA and any other act replacing or
supplementing the SSPA and all the other applicable laws and regulations;
(f) the Securities are being issued and sold outside the Republic of
France and that, in connection with their initial distribution, it has not
offered or sold and will not offer or sell, directly or indirectly, any
Securities to the public in the Republic of France, and that it has not
distributed and will not distribute or cause to be distributed to the
public in the Republic of France the Prospectus Supplement, the Prospectus
or any other offering material relating to the Securities; and
(g) it and each of its affiliates has not offered or sold, and it will
not offer or sell, the Securities by means of any document to persons in
Hong Kong other than persons whose ordinary business it is to buy or sell
shares or debentures, whether as principal or agent, or otherwise in
circumstances which do not constitute an offer to the public within the
meaning of the Hong Kong Companies Ordinance (Chapter 32 of the Laws of
Hong Kong).
In addition to the legal opinions required by Sections 5(c) and 5(d) of
the Basic Provisions, the Underwriters shall have received an opinion of
Skadden, Arps, Slate, Meagher & Flom LLP, special U.S. tax counsel to the
Company, dated the Closing Date, to the effect that although the discussion set
forth in the Prospectus Supplement under the heading "United States Federal
Income Tax Considerations For Non-United States Holders" does not purport to
discuss all possible United States federal income tax consequences of the
purchase, ownership and disposition of the Securities to non-United States
holders of the Securities, such discussion constitutes, in all material
respects, a fair and accurate summary of the United States federal income tax
consequences of the purchase, ownership and disposition of the Securities to
non-United States holders of the Securities.
John R. Dye, Esq., Associate General Counsel of the Company, is counsel
to the Company. Skadden, Arps, Slate, Meagher & Flom LLP is special U.S. tax
counsel to the Company. Dewey Ballantine LLP is counsel to the Underwriters.
Please accept this offer no later than 9:00 o'clock p.m. Eastern
Standard Time on August 19, 2002 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 August 19,
2002, to purchase the Securities on the terms set forth therein."
Very truly yours,
SALOMON SMITH BARNEY INC.
BANC ONE CAPITAL MARKETS, INC.
LEHMAN BROTHERS INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BANC OF AMERICA SECURITIES LLC
BARCLAYS CAPITAL INC.
BEAR, STEARNS & CO. INC.
HSBC SECURITIES (USA) INC.
J.P. MORGAN SECURITIES INC.
MCDONALD INVESTMENTS INC., A KEYCORP
COMPANY
MELVIN SECURITIES, LLC
By: SALOMON SMITH BARNEY INC.
By: /s/ Jeffrey A. Drake
Name: Jeffrey A. Drake
Title: Vice President
ACCEPTED:
CITIGROUP INC.
By: /s/ Charles E. Wainhouse
Name: Charles E. Wainhouse
Title: Assistant Treasurer
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ANNEX A
NAME OF UNDERWRITER PRINCIPAL AMOUNT OF 2012 NOTES
- ------------------- ------------------------------
Salomon Smith Barney Inc. $ 855,000,000
Banc One Capital Markets, Inc. $ 25,000,000
Lehman Brothers Inc. $ 25,000,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated $ 25,000,000
Banc of America Securities LLC $ 10,000,000
Barclays Capital Inc. $ 10,000,000
Bear, Stearns & Co. Inc. $ 10,000,000
HSBC Securities (USA) Inc. $ 10,000,000
J.P. Morgan Securities Inc. $ 10,000,000
McDonald Investments Inc., a KeyCorp Company $ 10,000,000
Melvin Securities, LLC $ 10,000,000
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TOTAL $1,000,000,000
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