Terms Agreement for Sale of $45,000,000 Equity Linked Securities (ELKS) by Salomon Smith Barney Holdings Inc. to Underwriters

Summary

Salomon Smith Barney Holdings Inc. has agreed to sell $45 million in Equity Linked Securities (ELKS) based on Nasdaq-100 Shares to a group of underwriters led by Salomon Smith Barney Inc. The ELKS mature on February 28, 2002, pay semi-annual coupons, and are not redeemable before maturity. The agreement sets the purchase price, payment terms, and delivery details, and incorporates terms from a prior underwriting agreement. The Bank of New York acts as trustee. The agreement is effective upon acceptance by the Company and the underwriters.

EX-1.01 2 y45970mex1-01.txt TERMS AGREEMENT 1 Exhibit 1.01 TERMS AGREEMENT February 23, 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 $45,000,000 aggregate principal amount of its Equity Linked Securities (ELKS ) (4,500,000 ELKS) based upon Nasdaq-100 Shares due February 28, 2002 (the "Securities"). Subject to the terms and conditions set forth herein or incorporated by reference herein, the underwriters (the "Underwriters") offer to purchase, severally and not jointly, the principal amount of the Securities as set forth opposite their respective names on the list attached hereto at 97.5% of the principal amount thereof. The Closing Date shall be February 28, 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 Nasdaq-100 Shares due February 28, 2002 Maturity: February 28, 2002 Coupon: Each ELKS will pay a coupon of $0.75 in cash semi-annually on each Interest Payment Date. Each coupon will be composed of $0.2419 of interest and a partial payment of an option premium in the amount of $0.5081. 2 Maturity Payment: Holders of the ELKS will be entitled to receive at maturity the Maturity Payment (as defined in the Prospectus Supplement dated February 23, 2001 relating to the Securities) Interest Payment Dates: August 28, 2001 and February 28, 2002 Regular Record Dates: August 27, 2001 and February 27, 2002 Initial Price To Public: 100% of the principal amount thereof, plus accrued interest from February 28, 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 Underwriters hereby agree that the Securities will be in the form of Book-Entry Notes and shall be delivered on February 28, 2001 against payment of the purchase price to the Company by wire transfer in immediately 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." 2 3 The Underwriters hereby agree 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 Underwriters. Cleary, Gottlieb, Steen & Hamilton is special tax counsel to the Company. Please accept this offer no later than 9:00 p.m. on February 23, 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: 3 4 "We hereby accept your offer, set forth in the Terms Agreement, dated February 23, 2001, to purchase the Securities on the terms set forth therein." Very truly yours, SALOMON SMITH BARNEY INC., as Representative of the several underwriters By SALOMON SMITH BARNEY INC. By: /s/ Thomas Petrone ------------------------------------------ Name: Thomas Petrone Title: Managing Director ACCEPTED: SALOMON SMITH BARNEY HOLDINGS INC. By: /s/ Geoffrey Richards ------------------------------------------------- Name: Geoffrey Richards Title: Vice President 4 5 UNDERWRITERS PRINCIPAL AMOUNT NUMBER OF ELKS - ------------ ---------------- -------------- Salomon Smith Barney Inc. $44,536,000 4,453,600 Countrywide Securities Corporation $ 464,000 46,400 ----------- ----------- Total $45,000,000 4,500,000