EXHIBIT 1.02
TERMS AGREEMENT
October 3, 1997
Travelers Group Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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 4,000,000 Depositary Shares (the
"Firm Securities"), each representing a 1/5th interest in a share of a series of
its 5.864% Cumulative Preferred Stock, Series M, 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 October 8, 1997 to the date of
payment and delivery.
The Depositary Shares will be issued by The Bank of New York (the
"Depositary") pursuant to the terms of a Deposit Agreement dated as of October
3, 1997 among the Company, The Bank of New York, as Depositary, and the holders
from time to time of the Firm Securities.
The Firm Closing Date shall be October 8, 1997 at 9:00 A.M. New York
City time at the offices of the Company, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000.
The Underlying Preferred Shares shall have the following terms:
Title: 5.864% Cumulative Preferred Stock, Series M
Dividend Rate: 5.864% per annum
Dividend Payment
Dates: February 1, May 1, August 1 and November 1,
commencing November 1, 1997; dividends accrue
from October 8, 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: $50.00 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 October 8, 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 of 5.864% Cumulative Preferred
Stock, Series M, of Travelers Group Inc.,
dated October 7, 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
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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 certificated securities,
issued in accordance with the provisions
contained in the Prospectus Supplement dated
October 3, 1997.
The initial price to the public of the Depositary Shares shall be
$50.00 per Depositary Share, plus accrued dividends, if any, from October 8,
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.
Xxxxxxx X. Xxxxxx, III is counsel to the Company. Xxxxx Xxxxxxxxxx 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 The Bank of New York, 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.
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The Underwriters are not authorized to solicit offers to purchase any
of the Firm Securities as Contract Securities pursuant to Delayed Delivery
Contracts.
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 October 3,
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:
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"We hereby accept your offer, set forth in the Terms Agreement,
dated October 3, 1997 to purchase the Firm Securities on the terms set forth
therein."
Very truly yours,
XXXXX XXXXXX INC.
XXXXXX BROTHERS INC.
XXXXXX XXXXXXX & CO. INCORPORATED
SALOMON BROTHERS INC
As Underwriters
By XXXXX XXXXXX INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
ACCEPTED:
TRAVELERS GROUP INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Deputy Treasurer
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Number of
Shares of
Underwriter Firm Securities
----------- ---------------
Xxxxx Xxxxxx Inc. . . . . . . . . . . . . . . . . 1,000,000
Xxxxxx Brothers Inc. . . . . . . . . . . . . . . 1,000,000
Xxxxxx Xxxxxxx & Co. Incorporated . . . . . . . . 1,000,000
Salomon Brothers Inc . . . . . . . . . . . . . . 1,000,000
---------
Total. . . . . . . . . . . . . . . . . . . . 4,000,000
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