Exhibit 1.01
TERMS AGREEMENT
October 24, 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 $500,000,000 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 99.439% of the principal amount thereof, plus
accrued interest on the principal amount from August 26, 2002. The Securities
form a part of the same series as the Company's outstanding 5.625% Subordinated
Notes due 2012, issued on August 26, 2002. The Closing Date shall be October 31,
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: ........................... 99.864% of the principal amount thereof, plus
accrued interest from August 26, 2002
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
October 24, 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 International, 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";
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(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";
(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;
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(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 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 October 24, 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 October
24, 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
BARCLAYS CAPITAL INC.
BEAR, STEARNS & CO. INC.
BLAYLOCK & PARTNERS, L.P.
SCOTIA CAPITAL (USA) INC.
WACHOVIA SECURITIES, INC.
THE WILLIAMS CAPITAL GROUP, L.P.
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. $425,000,000
Banc One Capital Markets, Inc. $ 15,000,000
Lehman Brothers Inc. $ 15,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated $ 15,000,000
Barclays Capital Inc. $ 5,000,000
Bear, Stearns & Co. Inc. $ 5,000,000
Blaylock & Partners, L.P. $ 5,000,000
Scotia Capital (USA) Inc. $ 5,000,000
Wachovia Securities, Inc. $ 5,000,000
The Williams Capital Group, L.P. $ 5,000,000
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TOTAL $500,000,000
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