EXHIBIT 1.01
TERMS AGREEMENT
April 30, 2003
Citigroup Inc.
399 Park Avenue
New York, New York 10043
Attention: Treasurer
Ladies and Gentlemen:
We understand that Citigroup Inc., a Delaware corporation (the
"Company"), proposes to issue and sell $750,000,000 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 99.417% of the principal amount thereof, plus
accrued interest, if any, from the date of issuance. The Closing Date shall be
May 7, 2003, 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: ............................................. 4.875% Subordinated Notes Due 2015
Maturity: .......................................... May 7, 2015
Interest Rate: ..................................... 4.875% per annum
Interest Payment Dates: ............................ Semi-annually on the 7th of May and November,
commencing November 7, 2003
Initial Price to Public: ........................... 99.892% 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 April
30, 2003, to the Prospectus, dated January 29, 2003
Record Date: ....................................... The April 15 or October 15 preceding each Interest
Payment Date
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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") or its
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 DTC, Euroclear Bank
S.A./N.V., as operator of the Euroclear System, and Clearstream International
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. The provisions of Sections 11.03 and 11.04 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 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
"(333-102206), 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 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";
(h) 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
(i) 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 Company further agrees and hereby represents that it has
been informed of the guidance relating to stabilization provided by the
Financial Services Authority, in particular in the section MAR 2 Annex 2G of the
Financial Services Handbook, and has not taken or omitted to take any action and
will not take any action or omit to take any action (such as issuing any press
release relating to any Securities without the Stabilization/FSA legend) which
may result in the loss by any of the Underwriters of the ability to rely on any
stabilization safe harbor provided by the Financial Services Authority under the
Financial Services and Markets Act 2000.
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 Securities, 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 which have not resulted and
will not result in an offer to the public in the United Kingdom for
purposes of the Public Offers of Securities Regulations 1995;
(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 Securities in circumstances in which Section 21(1) of FSMA does
not apply the Company;
(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
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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 the
Securities Selling Prospectus Act (the "SSPA") of the Federal Republic
of Germany (Wertpapier-Verkaufsprospektgesetz). In particular, each
Underwriter represents that it has undertaken not to engage in a 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;
(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), and unless
permitted to do so under the securities laws of Hong Kong, no person
has issued or had in its possession for the purposes of issue, and will
not issue or have in its possession for the purpose of issue, any
advertisement, document or invitation relating to the Securities other
than with respect to the Securities to be disposed of to persons
outside Hong Kong or only to persons whose business involves the
acquisition, disposal or holding of securities, whether as principal or
agent; and
(h) it acknowledges that the Securities may not be
offered, sold, transferred or delivered in or from The Netherlands as
part of their initial distribution or at any time thereafter directly
or indirectly, other than to individuals or legal entities (which
include, but are not limited to, banks, brokers, dealers or finance
companies which are subject to adequate supervision), institutional
investors, insurance companies, pension funds, central governments and
large public international organizations and large undertakings
(through their treasury department) which are listed on a sufficiently
regulated stock exchange, who or which regularly trade or invest in
securities in the conduct of a business or a profession for their own
account, all within the meaning of the Securities Transactions
Supervision Act 1995 (Wet Toezicht Effectenverkeer 1995).
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
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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. Cleary, Gottlieb, Steen & Hamilton is counsel
to the Underwriters.
Please accept this offer no later than 9:00 p.m. Eastern Time
on April 30, 2003 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 April 30, 2003, to purchase the Securities on the terms set
forth therein."
Very truly yours,
CITIGROUP GLOBAL MARKETS INC.
BANC ONE CAPITAL MARKETS, INC.
BEAR, STEARNS & CO. INC.
LEHMAN BROTHERS INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BANC OF AMERICA SECURITIES LLC
BB&T CAPITAL MARKETS, A DIVISION OF
SCOTT & STRINGFELLOW, INC.
BLAYLOCK & PARTNERS, L.P.
ORMES CAPITAL MARKETS, INC.
By: CITIGROUP GLOBAL MARKETS INC.
By: /s/ Jack McSpadden Jr
-------------------------------------
Name: Jack McSpadden Jr.
Title: Managing Director
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 SECURITIES
- ------------------- ------------------------------
Citigroup Global Markets Inc. $ 630,000,000
Banc One Capital Markets, Inc. 22,500,000
Bear, Stearns & Co. Inc. 22,500,000
Lehman Brothers Inc. 22,500,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated 22,500,000
Banc of America Securities LLC 7,500,000
BB&T Capital Markets, a Division of 7,500,000
Scott & Stringfellow, Inc.
Blaylock & Partners, L.P. 7,500,000
Ormes Capital Markets, Inc. 7,500,000
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TOTAL $ 750,000,000
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