Terms Agreement for The Gillette Company $83,000,000 Floating Rate Notes due 2043 with Merrill Lynch, Morgan Stanley, and UBS Warburg

Summary

This agreement outlines the terms for the sale of $83 million in Floating Rate Notes due 2043 by The Gillette Company to underwriters Merrill Lynch, Morgan Stanley, and UBS Warburg. The notes will pay interest based on three-month LIBOR minus 0.30%, reset quarterly, and mature on April 2, 2043. The agreement specifies purchase price, interest payment dates, redemption and repayment options, and the roles of agents and trustee. The agreement also details procedures in case any underwriter defaults on their purchase commitment.

EX-1.4 3 b46108gcexv1w4.txt TERMS AGREEMENT The Gillette Company Floating Rate Notes due 2043 TERMS AGREEMENT March 26, 2003 The Gillette Company Prudential Tower Building Boston, Massachusetts 02199 Attention: Subject in all respects to the terms and conditions of the Distribution Agreement, dated August 23, 2002, between Merrill Lynch, Pierce, Fenner & Smith Incorporated and you (the "Agreement"), the undersigned (collectively, the "Underwriters") severally agree to purchase the respective principal amount of the Floating Rate Notes due 2043 (the "Notes") of The Gillette Company (the "Company") set forth opposite each such Underwriter's name in Annex B of this Agreement. The Company hereby appoints Morgan Stanley & Co. Incorporated and UBS Warburg LLC (the "Additional Agents") as Agents under the Agreement in connection with the purchase as principal by each of them, in the respective amounts set forth on Annex B hereto, of the Notes, and Merrill Lynch, Pierce, Fenner & Smith Incorporated agrees to such appointment. The Company agrees that, solely with respect to the Notes, each Additional Agent shall be an "Agent" for all purposes of the Agreement and shall be entitled to all rights and interests and subject to all obligations and liabilities of an Agent thereunder, to the same extent as if each Additional Agent were a named Agent thereunder, including the benefit of the representations and warranties, agreements and indemnities (including contribution) by the Company in favor of the Agents set forth in the Agreement. THE NOTES Aggregate Principal Amount: $83,000,000 Issue Price: 100% of Principal Amount plus accrued interest, if any, from April 2, 2003 Purchase Price: 99% of Principal Amount Method of Determining Interest Rate: Three-Month LIBOR, reset quarterly, minus 0.30%, accruing from April 2, 2003 January 2, April 2, July 2 and October 2 of each Interest Payment Dates: year, commencing July 2, 2003 Date of Maturity: April 2, 2043 Redemption Provisions: In whole or in part, at the option of the Company, on or after April 2, 2033 at the redemption prices specified in the form of Pricing Supplement attached hereto as Annex A plus accrued interest thereon Repayment Provisions: Beginning April 2, 2004, in whole or in part, at the option of holders of the Notes, on April 2 of every year through 2014 and every third year thereafter at the repayment prices specified in the form of Pricing Supplement attached hereto as Annex A plus accrued interest thereon Survivor's Option: The Notes are not subject to the Survivor's Option. Closing Date: April 2, 2003 Method of Payment: Immediately available funds Trustee, Paying Agent and Authenticating Agent: Bank One, N.A. Calculation Agent: Bank One, N.A.

2 Documentation Requirements: Each of the documents specified in Sections 5(b)(1), (c) and (d) of the Agreement shall be dated as of, and delivered to the undersigned on, the Closing Date Other terms: The Notes shall have such additional terms as are specified in the form of Pricing Supplement attached hereto as Annex A Allocation among Each of the Underwriters Underwriters: severally agrees to purchase the respective principal amount of Notes set forth next to its name in Annex B attached hereto Default of Underwriters: The provisions set forth in Annex C attached hereto are incorporated herein by reference

This Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts hereof shall constitute a single instrument. 3 MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED MORGAN STANLEY & CO. INCORPORATED UBS WARBURG LLC By: Merrill Lynch, Pierce, Fenner & Smith Incorporated By: /s/ Scott Primrose ------------------------------------------ Authorized Signatory Confirmed and Accepted, as of the date first above written: THE GILLETTE COMPANY By: /s/ Gail F. Sullivan ---------------------------- Name: Gail F. Sullivan Title: Vice President and Treasurer 4 ANNEX A [Pricing Supplement] ANNEX B
UNDERWRITER PRINCIPAL AMOUNT ----------- ---------------- Merrill Lynch, Pierce, Fenner & Smith Incorporated ......................... $ 25,000,000 Morgan Stanley & Co Incorporated .......................... 33,000,000 UBS Warburg LLC ........................................... 25,000,000 ------------- Total ............................................ $ 83,000,000
ANNEX C If any Underwriter or Underwriters default in their obligations to purchase Notes agreed to be purchased by such Underwriter or Underwriters hereunder and the aggregate principal amount of Notes which such defaulting Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of the total principal amount of Notes, the Underwriters may make arrangements satisfactory to the Company for the purchase of such Notes by other persons, including any of the Underwriters, but if no such arrangements are made by the Closing Date, the nondefaulting Underwriters shall be obligated severally, in proportion to their respective commitments hereunder (or in such other proportions as the non-defaulting Underwriters may agree) to purchase the Notes which such defaulting Underwriters agreed but failed to purchase. If any Underwriter or Underwriters so default and the aggregate principal amount of Notes with respect to which such default or defaults occur exceeds 10% of the total principal amount of Notes and arrangements satisfactory to the Underwriters and the Company for the purchase of such Notes by other persons are not made within 36 hours after such default, this Terms Agreement will terminate without liability on the part of any nondefaulting Underwriter or the Company. As used herein, the term "Underwriter" includes any person substituted for a Underwriter under the terms of this paragraph. Nothing herein will relieve a defaulting Underwriter from liability for its default. 2