UNITED TECHNOLOGIES CORP /DE/, S-3, 1999-07-15

UNITED TECHNOLOGIES CORP /DE/
S-3, 1999-07-15
AIRCRAFT ENGINES & ENGINE PARTS

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<PAGE>

As filed with the Securities and Exchange Commission on July 15, 1999.

Registration Nos. [ ] 333-74195 33-46916
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
Form S-3
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
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UNITED TECHNOLOGIES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 06-0570975
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One Financial Plaza
Hartford, Connecticut 06101
(860) 728-7000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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William H. Trachsel, Esq.
Senior Vice President, General Counsel and Secretary
United Technologies Corporation
One Financial Plaza
Hartford, Connecticut 06101
(860) 728-7800
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
David Lopez, Esq. David B. Harms, Esq.
Cleary, Gottlieb, Steen & Hamilton Sullivan & Cromwell
One Liberty Plaza 125 Broad Street
New York, New York 10006 New York, New York 10004
(212) 225-2000 (212) 558-4000
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Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities being offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
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CALCULATION OF REGISTRATION FEE
<TABLE>
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<CAPTION>
Proposed Proposed
Amount maximum maximum
Title of each class of securities to be offering price aggregate Amount of
to be registered registered(1) per unit(2) offering price(2) registration fee(3)
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<S> <C> <C> <C> <C>
Debt Securities, Debt
Warrants, Currency
Warrants
and Stock-Index
Warrants.............. $400,000,000(4) 100%(2) $400,000,000 $111,200
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</TABLE>
(1) In United States dollars or the equivalent thereof in any other currency,
currency unit or units, or composite currency or currencies at the dates of
issuance.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) Pursuant to Rule 429 promulgated under the Securities Act of 1933, the
amount of registration fees does not include $147,203 previously paid to
the Commission relating to $71,050,000 of Debt Securities, Debt Warrants,
Currency Warrants and Stock-Index Warrants previously registered pursuant
to Registration Statement No. 33-46916, which remain unissued at the close
of business on July 15, 1999, or $22,048 previously paid to the Commission
relating to $528,950,000 of Debt Securities, Debt Warrants, Currency
Warrants and Stock-Index Warrants previously registered pursuant to a
Registration Statement on Form S-3, File No. 333-74195, which remain
unissued at the close of business on July 15, 1999.
(4) Such amount represents the principal amount of any Debt Securities issued
at their principal face amount, the issue price rather than the principal
amount of any Debt Securities issued at an original issue discount, the
issue price of any Debt Warrants, Currency Warrants and Stock-Index
Warrants, and the exercise price of any Debt Securities issuable upon the
exercise of Debt Warrants. Debt Warrants, Currency Warrants and Stock-Index
Warrants may be sold separately or with Debt Securities or other Debt
Warrants, Currency Warrants and Stock-Index Warrants. It is not practicable
to determine the number of Debt Warrants, Currency Warrants and Stock-Index
Warrants and the proposed maximum offering prices thereof at this time.
--------------
<PAGE>

This Registration Statement, which is a new Registration Statement, also
constitutes Post-Effective Amendment No. 3 to Registration Statement No. 33-
46916, which was declared effective on May 8, 1992, and Post Effective
Amendment No. 1 to Registration Statement No. 333-74195, which was declared
effective on April 16, 1999. Such Post-Effective Amendments shall hereafter
become effective concurrently with the effectiveness of this Registration
Statement and in accordance with Section 8(c) of the Securities Act of 1933.
Pursuant to Rule 429 under the Securities Act of 1933, the prospectus and
prospectus supplement filed as part of this Registration Statement also
constitute a prospectus and prospectus supplement for Registration Statement
No. 33-46916 and Registration Statement No. 333-74195; the $71,050,000 of Debt
Securities, Debt Warrants, Currency Warrants and Stock-Index Warrants remaining
unsold from Registration Statement No. 33-46916 and the $528,950,000 aggregate
amount of Debt Securities, Debt Warrants, Currency Warrants and Stock-Index
Warrants remaining unsold from Registration Statement No. 333-74195 will be
combined with the $400,000,000 aggregate amount of Debt Securities, Debt
Warrants, Currency Warrants and Stock-Index Warrants to be registered pursuant
to this Registration Statement to enable United Technologies Corporation to
offer an aggregate amount of $1,000,000,000 of securities pursuant to the
combined prospectus and prospectus supplement.

The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

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<PAGE>

EXPLANATORY NOTE

This Registration Statement contains (i) a Prospectus, consisting of a
cover page and numbered pages 1 through 32, relating to debt securities, debt
warrants, currency warrants and stock-index warrants of United Technologies
Corporation having an aggregate initial public offering price or purchase price
of up to U.S. $1,000,000,000 or the equivalent thereof in one or more foreign
currencies or composite currencies and (ii) a Prospectus Supplement, consisting
of a cover page, numbered pages S-1 through S-35 and a back cover page,
relating to the possible offering by United Technologies Corporation, after the
effectiveness of this Registration Statement, of such debt securities as
Medium-Term Notes having an aggregate initial public offering price or purchase
price of up to U.S. $1,000,000,000 or the equivalent thereof in one or more
foreign currencies or composite currencies. In the event that any such Medium-
Term Notes are offered and sold, pricing information and certain other matters
with respect thereto will be included in one or more pricing supplements filed
in accordance with the rules and regulations of the Securities and Exchange
Commission.

United Technologies Corporation may increase or decrease the initial public
offering price or purchase price of Medium-Term Notes that may be offered
pursuant to the Prospectus Supplement contained in this Registration Statement
or otherwise modify the Medium-Term Note program described therein. Upon any
material change in the Medium-Term Note program, United Technologies
Corporation will file an additional Prospectus Supplement or Prospectus
Supplements describing such change in accordance with the rules and regulations
of the Securities and Exchange Commission. United Technologies Corporation also
may offer additional debt securities in other series, as well as debt warrants,
currency warrants and stock-index warrants, pursuant to the Prospectus
contained in this Registration Statement. Upon any public offering or sale of
any such other series of debt securities, debt warrants, currency warrants or
stock-index warrants covered by the Prospectus, a Prospectus Supplement or
Prospectus Supplements describing such series of debt securities, debt
warrants, currency warrants or stock-index warrants and the particular terms of
such offers or sales will be filed in accordance with the rules and regulations
of the Securities and Exchange Commission.
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and it is not the solicitation of an offer to +
+buy these securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JULY 15, 1999

Prospectus Supplement to Prospectus dated July , 1999

$1,000,000,000

[LOGO] United Technologies
Medium-Term Notes, Series C

-----------

TERMS OF SALE

The following terms may apply to the notes that we may sell at one or more
times. The final terms of each note will be included in a pricing supplement.
We will receive between $998,750,000 and $992,500,000 of the proceeds from the
sale of the notes, after paying the agents commissions of between $1,250,000
and $7,500,000.

. stated maturity of 9 . not convertible,
months to 30 years amortizing or subject
. fixed or floating to a sinking fund,
interest rate, zero- unless otherwise
coupon or issued with provided in a pricing
original issue supplement
discount; a floating . interest on fixed rate
interest rate may be notes paid semi-
based on: annually in arrears on
. CD rate June 15 and December 15
. commercial paper rate and at maturity, unless
. federal funds rate otherwise provided in a
. LIBOR pricing supplement
. EURIBOR . interest on floating
. treasury rate rate notes paid
. CMT rate monthly, quarterly,
. prime rate semi-annually or
. any other rate annually, unless
specified by us in the otherwise provided in a
pricing supplement pricing supplement
. any combination of . may be denominated in a
rates specified in the currency other than
pricing supplement U.S. dollars or in a
. amount of principal or composite currency
interest may be . fully registered form
determined by reference . minimum denominations
to an index or formula of $100,000 increased
. may be book-entry form in integral multiples
only of $1,000, unless
. may be subject to otherwise provided in a
redemption at our pricing supplement
option or repurchase at . settlement in
the option of the immediately available
holder funds

We do not plan to list the notes for trading on a securities exchange.

We may also offer from time to time warrants to purchase notes. The note
warrants may be offered either with notes or separately. The specific terms of
each note warrant will be described in a note warrant supplement. Unless
accompanied by a note warrant supplement, note warrants are not offered by this
prospectus supplement.
-----------
Neither the Securities and Exchange Commission nor any other regulatory body
has approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.

-----------

We may sell the notes directly or through one or more agents or dealers,
including the agents listed below. The agents are not required to sell any
particular amount of the notes. They will use their reasonable best efforts to
sell the notes offered.

-----------
Goldman, Sachs & Co.
Merrill Lynch & Co.
Salomon Smith Barney
-----------

Prospectus Supplement dated July , 1999.
<PAGE>

FORWARD-LOOKING STATEMENTS

This prospectus supplement, the accompanying prospectus and the documents
incorporated by reference in the prospectus contain "forward-looking"
statements, as defined in the Private Securities Litigation Reform Act of 1995.
These statements reflect our current views about future events, prospects,
projections or financial performance, and are based on projections and
estimates we have made about the economy, the markets for aerospace and
building systems products throughout the world and the effects of government
regulations on the economy in general and within the markets in which we and
our subsidiaries operate. These statements are subject to uncertainties, risks
and other factors that could affect our operations, products and markets and
cause our actual results, performance or achievements to differ materially. You
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date on which they were made.

For information identifying economic, political, climatic, currency,
regulatory, technological, competitive and other important factors that may
affect our operations, products and markets and could cause actual results to
vary materially from those we anticipate in our forward-looking statements, see
the discussion included under the headings "Description of Business by
Operating Segment", "Other Matters Relating to the Corporation's Business as a
Whole" and "Legal Proceedings" in our Annual Report on Form 10-K for the year
ended December 31, 1998 and similar matters that may be discussed in subsequent
filings. See "Where You Can Find More Information" in the accompanying
prospectus for more information on how to obtain copies of these filings.

DESCRIPTION OF NOTES

The notes offered by this prospectus supplement are debt securities, as
described in the accompanying prospectus. However, the following description of
the particular terms of the notes supplements and, where inconsistent, replaces
the description of the general terms and provisions of the debt securities
under the heading "Description of Debt Securities" in the accompanying
prospectus. In considering an investment in the notes, you should read this
prospectus supplement, the accompanying prospectus and the pricing supplement.
The following description will apply to each note unless otherwise provided in
the pricing supplement.

Unless the context otherwise indicates, the terms "UTC", "we", "us" and
"our" mean United Technologies Corporation.

Amount of notes offered by this prospectus supplement

The aggregate principal face amount of notes issued at their principal face
amount plus the aggregate issue price of notes issued at original issue
discount will be limited to a maximum aggregate amount of $1,000,000,000, or
the equivalent in one or more currencies or composite currencies other than
U.S. dollars. We may not offer notes by this prospectus supplement beyond the
$1,000,000,000 maximum aggregate amount. The registration statement relating to
the debt securities, including the notes offered by this prospectus supplement,
is similarly limited to a total of $1,000,000,000 and is a "shelf" registration
statement that allows for the offer and sale of other securities by additional
prospectus supplements. As a result, any sales of those other securities will
reduce the $1,000,000,000 maximum aggregate amount of notes that can be offered
by this prospectus supplement. The following table shows the types of
securities that we can offer separately from the notes offered by this
prospectus supplement, and the aggregate amounts by which sales of those
securities will reduce the maximum aggregate amount of notes that can be
offered by this prospectus supplement:

S-2
<PAGE>

<TABLE>
<CAPTION>
Will reduce the
maximum aggregate
amount by their
Securities of this type: aggregate:
------------------------ ------------------------
<S> <C>
. debt securities, issued at their face amount principal face amount
. debt securities, issued at original issue discount issue price
. debt warrants issue price
. currency warrants issue price
. stock-index warrants issue price
. debt securities issuable upon exercise of debt warrants exercise price
</TABLE>

To calculate the $1,000,000,000 maximum aggregate amount, the U.S. dollar
equivalent of notes denominated in a currency or composite currency other than
U.S. dollars will be determined upon issuance by an exchange rate agent, on the
basis of the market exchange rate for the relevant currencies on the applicable
trade dates. See "--Payment of Principal and Interest--Currencies--Method of
Determining U.S. Dollar Amounts" for a description of the exchange rate agent
and the market exchange rate.

The indenture

The notes offered by this prospectus supplement will be issued under an
indenture dated as of April 1, 1990, which we entered into with State Street
Bank and Trust Company, a Massachusetts trust company (as successor to The
Connecticut National Bank), as trustee. The indenture is described more fully
under "Description of Debt Securities" in the accompanying prospectus, and is
also filed as an exhibit to the registration statement. See "Where You Can Find
More Information" in the accompanying prospectus for more information on how to
obtain a copy of the indenture.

The indenture and its associated documents contain the full legal text of
the matters described in this section. This section is a summary that does not
describe every aspect of the notes offered by this prospectus supplement.
Consequently, it is subject to and qualified in its entirety by reference to
all the provisions of the indenture, including definitions of terms that have
been given special meaning in the indenture.

The Medium-Term Notes, Series C, Due from Nine Months to Thirty Years from
Date of Issue, of which the notes offered by this prospectus supplement will
form a part, constitute one series of the indenture securities described in the
accompanying prospectus, unlimited as to principal amount, which we have
established under the indenture. The $1,000,000,000 maximum aggregate amount
described above under "Amount of Notes Offered by this Prospectus Supplement"
applies only to the notes offered by this prospectus supplement and not to the
Series C notes as a whole. No Series C notes are currently outstanding under
the indenture.

Terms of notes

We may offer the notes on a continuous basis. They will mature from nine
months to thirty years from the date of issue, as selected by you, the
purchaser, and agreed to by us. The notes may be redeemable at our option or
repayable at your option before their maturity date, which we will specify in
the pricing supplement. Each note will bear interest from the date it is
issued, at either a fixed rate or a floating rate.

. Fixed rate notes will have a constant interest rate, which may be zero in
the case of some notes issued at a discount from the principal amount
payable on the maturity date, known as zero-coupon notes.

. Floating rate notes, bearing a floating rate or rates of interest, will
bear interest in each interest period based on an independent interest
rate, known as the base rate, specified in the pricing supplement. The
interest rate for floating rate notes will be calculated periodically by
reference to the base rate, which may be further adjusted:

S-3
<PAGE>

--by adding or subtracting a specified number of basis points called the
"spread", with one basis point being 0.01%; or

--by multiplying by a fixed percentage called a "spread multiplier".

The pricing supplement will specify the base rate, spread or spread
multiplier, as applicable, for each floating rate note. Notes can have more
than one floating rate. For example, we may provide that a floating rate note
will initially bear interest at a rate determined by one formula, to be
replaced by a different formula after a specified date.

The "maturity date" of a note means the date that is specified on the
certificate representing the note and in the pricing supplement as the date on
which it will mature.

The "maturity" of a note means the date on which the principal amount of
the note actually becomes due and payable in accordance with its terms. This
date could be the same as the maturity date, but it may also be another date
when the principal amount of the note becomes payable, for example by
declaration of acceleration, call for redemption or otherwise.

Notes may be issued as discount notes. A discount note is any note,
including any zero coupon note, that:

. is issued at a price lower than its principal amount; and

. provides for payment of an amount less than its principal amount upon
redemption, repayment or acceleration of the maturity date; or

. would for any other reason be considered an original issue discount note
for United States federal income tax purposes.

Unless we provide otherwise in the pricing supplement, the amount we will
pay on a discount note upon redemption, repayment or acceleration of its
maturity date will equal the "amortized face amount" of the discount note, plus
unpaid interest, if any, accrued on the discount note from the date of issue to
the date of the payment.

The amortized face amount of a discount note will equal the sum of:

. its issue price; plus

. the portion of the difference between the issue price and the principal
amount of the discount note that has accrued at the yield to maturity
stated in the pricing supplement, computed in accordance with generally
accepted United States bond yield computation principles, at that date.

However, the amortized face amount of a discount note can never exceed its
stated principal amount. See also "United States Tax Considerations--Original
Issue Discount" for information about tax consequences of an investment in
discount notes.

Each note will be issued in fully registered form without coupons. Each
note will either be a global note, represented by a global certificate
registered in the name of a depositary or its nominee, or a certificated note,
represented by a certificate issued in definitive form. The pricing supplement
will specify which form the notes will take and the identity of the depositary,
if any. The depositary will normally be The Depository Trust Company, also
known as DTC. All notes issued on the same day and having the same terms may be
represented by a single global note. A beneficial interest in a global note
will be shown on, and transfers of any beneficial interest will be effected
only through, records maintained by the depositary and its participants. We, or
our paying agent, will make payments of principal and interest, if any, on
notes represented by a global note to the depositary or its nominee. See "--
Book-Entry Notes" in this prospectus supplement and "Legal Ownership--Global
Securities" in the prospectus for more information about book-entry notes and
the depositary's procedures.

In the following description of the notes, we will frequently refer to the
"holder" of a note. The holder is the person or other entity that is named in
our securities register as the legal owner of the note, and our obligations and

S-4
<PAGE>

the obligations of the trustee flow only to that entity. The holder may be you,
if you hold a definitive certificate registered in your name, but it may
instead be the depositary, in the case of a global note, or the bank, broker or
other financial institution at which you have your account if you hold your
interest in a note in "street name". Keep in mind as you read this description
of the notes that, while you will generally have effectively the same
entitlements and choices as the holder, they may flow to you indirectly through
other institutions, and you will need to coordinate with them accordingly. For
a more complete description of these matters, see "Legal Ownership" in the
prospectus.

Each note will be denominated in a "specified currency", which may be a
single currency or composite currency that will be specified on the certificate
representing the note and in the pricing supplement. Unless otherwise provided
in the pricing supplement, the authorized denominations of notes will be U.S.
$100,000 and any amount greater than U.S. $100,000 that is an integral multiple
of U.S. $1,000. The pricing supplement will state the authorized denominations
of notes not denominated in U.S. dollars.

We may offer different interest rates with respect to the notes, depending
upon various factors, including the aggregate principal amount of notes
purchased in any single transaction. We may also offer notes with different
variable terms other than interest rates concurrently to different investors.
We may change interest rates or formulas and other terms of notes from time to
time, except that we cannot change the terms of a note once it has been issued
or once we have accepted an offer to purchase it.

Terms specified in pricing supplements. The pricing supplement relating to
each note will describe the following terms:

. the specified currency in which the note is denominated, as well as certain
other terms if the currency is not U.S. dollars;

. whether the note is a fixed rate note or a floating rate note, and whether
it is a discount note or a zero-coupon note;

. whether the note is a "currency indexed note" on which payments of interest
and/or principal may be determined by reference to the relationship between
two or more specified currencies, or an "indexed note" on which payments of
interest and/or principal may be determined by reference to the price of
one or more specified commodities or to one or more equity indices or other
indices or by other similar methods, and the mechanics of these
determinations;

. the price, expressed as a percentage of the aggregate principal amount, at
which the note will be issued, if other than 100%;

. the trade date;

. the date on which the note will be issued;

. the maturity date of the note and whether we may extend the maturity date;

. for fixed rate notes, the annual rate at which the note will bear interest;

. for floating rate notes, all terms relating to the calculations by which
rates, amounts and periods of interest will be determined, including the
base rate and the spread or spread multiplier, as well as the other
essential terms and periods more fully described below under the heading
"--Floating Rate Notes", and any other terms relating to the particular
method of calculating the interest rate for that floating rate note;

. whether we may reset the interest rate on the note at our option;

. whether the note is redeemable at our option and/or repayable at the option
of the holder before its maturity date, and the provisions relating to
redemption or repayment;

. whether the note will be represented by a global note or a certificate
issued in definitive form; and

. any other terms of the note consistent with the provisions of the
indenture.

S-5
<PAGE>

Payment of principal and interest

Currencies

Payments in U.S. dollars; election to receive payment in specified
currencies. Unless otherwise provided in the pricing supplement, we will make
all payments on the notes, including notes not denominated in U.S. dollars, in
U.S. dollars in the manner described in the following paragraphs. However, if
permitted by the pricing supplement and the note, the holder of a note may
elect to receive payments on the note in the specified currency in which the
note is denominated. See "Foreign Currency Risks--Payment Currency" for
information about restrictions on this right to receive payment in a specified
currency other than U.S. dollars. To receive payments in a currency other than
U.S. dollars, the holder must deliver a written request to our paying agent in
The City of New York, which must be received on or before the applicable record
date or at least fifteen calendar days before maturity. This election will
remain in effect until the holder changes it by written notice to the paying
agent, again on or before the record date or at least fifteen days before
maturity. If you hold your interest in a note indirectly, either because it is
a global note or because you otherwise hold it in street name, you should check
with the institution through which you hold your interest in the note to
determine how to have it make this election for you. See "Legal Ownership" in
the prospectus for more information about procedures applicable to indirect
interests in notes.

We will bear all currency exchange costs unless a holder makes the election
referred to in the preceding paragraphs. In that case the holder will bear its
proportional portion of currency exchange costs, if any, by deductions from
payments otherwise due to it.

Method of determining U.S. dollar amounts. Unless otherwise provided in the
pricing supplement, the following method will be used for determining the
amount of U.S. dollar payments we will make on a note not denominated in U.S.
dollars:

. The pricing supplement will specify an exchange rate agent to make this
determination;

. at approximately 11:00 a.m., New York City time, on the second business day
preceding the applicable payment date, the exchange rate agent will choose
among quotations from three foreign exchange dealers for the purchase by
the quoting dealer, for settlement on the payment date, of the specified
currency for U.S. dollars;

. the exchange rate agent will select the quotation that yields the largest
number of U.S. dollars upon conversion of the specified currency, and use
this figure to determine the U.S. dollar amount to be paid with respect to
the note;

. the three foreign exchange dealers, one of which may be the exchange rate
agent, will be selected by the exchange rate agent and approved by us;

. if these bid quotations are not available, payments will be made in the
specified currency unless the specified currency is unavailable due to the
imposition of exchange controls or to other circumstances beyond our
control;

. in that case we will be entitled to make payments in U.S. dollars on the
basis of the "market exchange rate", which is the noon buying rate in The
City of New York for cable transfers in the specified currency as certified
for customs purposes by the Federal Reserve Bank of New York for the
specified currency on the second business day before the payment date; and

. if the market exchange rate is not available, we will be entitled to make
payments in U.S. dollars:

(1) if the specified currency is not a composite currency, on the basis of
the most recently available market exchange rate for that currency; or

(2) if the specified currency is a composite currency, in an amount
determined by the exchange rate agent to be the sum of the results
obtained by multiplying the number of units of each component currency
of the composite currency, as of the most recent date on which that

S-6
<PAGE>

currency was used, by the market exchange rate for that component
currency on the second business day before the relevant payment date,
or if the market exchange rate is not then available, by the most
recently available market exchange rate for the component currency.

As used throughout this prospectus supplement, a "business day" as it
relates to any note means any day which:

. is not a Saturday or Sunday;

. is not a day on which banking institutions generally are authorized or
required by law, regulation or executive order to close in The City of New
York;

. if the note is denominated in a specified currency other than U.S. dollars
or euros, (1) is not a day on which banking institutions are authorized or
required by law or regulation to close in the financial center of the
country issuing the specified currency and (2) is a day on which banking
institutions in that financial center are carrying out transactions in the
specified currency;

. if the note bears a floating interest rate based on LIBOR, as described
below, is a "London banking day", which is any day on which dealings in the
specified currency are transacted in the London interbank market; and

. if the note bears a floating interest rate based on EURIBOR or has a
specified currency of euros, or is a LIBOR note for which the index
currency is euros, is also a "euro business day", which means any day on
which the Trans-European Automated Real-Time Gross Settlement Express
Transfer (TARGET) System, or any successor system, is open for business.
See page S-14 for information about the index currency for LIBOR notes.

Payments

Interest payment dates. Each day on which we are to pay interest on a note,
other than at maturity, is called an "interest payment date". Each day on which
we determine to whom we must pay interest on the next interest payment date is
called a "regular record date". The interest payment dates and the regular
record dates for fixed rate notes are described below under "--Fixed Rate
Notes".

The interest payment dates for floating rate notes will be indicated in the
pricing supplement. Unless otherwise provided in the pricing supplement, each
regular record date for a floating rate note will be the fifteenth day
preceding each interest payment date.

Unless otherwise provided in the pricing supplement, regular record dates
need not be business days. Interest payment dates must be business days. If an
interest payment date would otherwise fall on a day that is not a business day,
the next business day will be the interest payment date. However, if this would
cause the interest payment date for a LIBOR note to fall in the next month, the
preceding business day will be the interest payment date for that LIBOR note.

A note may be issued between its first regular record date and its first
interest payment date. When that happens, we will pay interest on the first
interest payment date to the person to whom the note was issued, covering the
period from the date of issue to that interest payment date, unless the note
was issued in the form of a global note. In that case, we will pay interest on
the second interest payment date, to the registered holder on the regular
record date, covering the period from the date of issue through the second
interest payment date.

Unless otherwise provided in the pricing supplement, we will pay interest
on the notes on each interest payment date by mailing a check to the holder at
the address of the holder appearing on our security register on the applicable
regular record date. We will mail this check from an account at a bank outside
the United States if the check is payable in a currency other than U.S.
dollars. In the case of a global note, the holder to whom we send this check
will be the depositary or its nominee.

S-7
<PAGE>

Although we will generally make payments by check, as described above, a
holder of $10,000,000 or more in aggregate amount of notes of like tenor and
term, or the equivalent in another specified currency, will be entitled to
receive interest payments in immediately available funds. This aggregate amount
is determined based on the aggregate principal face amount of notes issued at
their principal face amount, and the aggregate issue price of notes issued at
original issue discount. Appropriate instructions must be received in writing
by the paying agent on or before the applicable record date. If you own a
beneficial interest in a global note, you will be paid in accordance with the
depositary's and the participant's procedures, as described under "--Book-Entry
Notes" in this prospectus supplement and "Legal Ownership" in the prospectus.

A holder electing to receive payments in a specified currency other than
U.S. dollars may simultaneously provide appropriate instructions to the paying
agent, and all payments to the holder will be made in immediately available
funds to an account maintained by the payee with a bank located outside the
United States.

Until the notes are paid or until payment of the notes is provided for, we
will, at all times, maintain a paying agent in The City of New York capable of
performing the duties described in the indenture. We have appointed State
Street Bank and Trust Company, N.A., New York, New York as co-paying agent. We
will notify holders in accordance with the indenture of any change in the
paying agent or its address.

Payments at maturity. Unless otherwise provided in the pricing supplement,
we will make payments of principal, premium, if any, and interest, if any, at
maturity to the holder on the date of maturity in immediately available funds
upon surrender of the notes at the office of the paying agent. We will make
these payments to an account maintained by the payee with a bank located
outside the United States if payable in a specified currency other than U.S.
dollars. The note must be presented to the paying agent in time for the paying
agent to make the payments in accordance with its normal procedures. See
"Important Currency Exchange Information" for more information about procedures
applicable to notes denominated in a specified currency other than U.S.
dollars. We will pay any administrative costs imposed by banks in connection
with making payments in immediately available funds, but any tax, assessment or
governmental charge imposed upon payments will be borne by the holders of the
affected notes.

Fixed rate notes

Each fixed rate note, except zero-coupon notes, will bear interest from its
issue date at the annual rate stated on the certificate representing the note
and in the pricing supplement, until its principal amount is paid or made
available for payment. In some circumstances the interest rate may be changed,
either before the maturity date or if the maturity of the note is extended. See
below under "--Subsequent Interest Periods" and "--Extension of Maturity" for
more information about changes in the interest rate. Unless otherwise provided
in the pricing supplement, interest on each fixed rate note will be payable at
maturity and semi-annually each June 15 and December 15, and the regular record
dates will be the May 31 preceding each June 15 and the November 30 preceding
each December 15. Each payment of interest on a fixed rate note will include
interest accrued through the day before the interest payment date, or maturity,
as the case may be. Any payment required to be made on a fixed rate note on a
day which is not a business day need not be made on that day, but may be made
on the next business day, with the same legal effect. No additional interest
will accrue as a result of payment delayed in this manner. Interest on fixed
rate notes, if any, will be computed on the basis of a 360-day year of twelve
30-day months.

Floating rate notes

How interest rates are determined

For the period from its issue date to the date on which its interest rate
is first reset,

S-8
<PAGE>

each floating rate note will bear interest at its initial interest rate, which
will be stated in the pricing supplement. After the date on which its interest
rate is first reset, it will, until its principal amount is paid or made
available for payment, bear interest at a rate determined by reference to one
or more base rates, which may be adjusted by a spread or spread multiplier. The
pricing supplement will designate one of the following base rates as applicable
to each floating rate note:

. the CD rate;

. the commercial paper rate;

. the federal funds rate;

. LIBOR;

. EURIBOR;

. the Treasury rate;

. the CMT rate;

. the prime rate; or

. another base rate as is stated in the pricing supplement and in that
floating rate note.

Unless otherwise provided in the pricing supplement, the interest rate on
each floating rate note will be calculated by reference to:

. the specified base rate:

. plus or minus the spread, if any

. multiplied by the spread multiplier, if any.

The spread or the spread multiplier will be specified in the pricing
supplement.

The index maturity for any floating rate note, which will be specified in
the pricing supplement, is the period of maturity of the instrument or
obligation from which the base rate is calculated.

As specified in the pricing supplement, a floating rate note may also have
either or both of the following:

. a maximum interest rate, which is a maximum limitation, or ceiling, on the
rate at which interest may accrue during any interest period; and

. a minimum interest rate, which is a minimum limitation, or floor, on the
rate at which interest may accrue during any interest period.

Some laws place limits on the rate of interest that can legally be paid.
Even if the maximum interest rate for a floating rate note may allow a higher
rate, the interest rate on any note can never be higher than the maximum rate
permitted by the law of the State of New York, as it may be modified by U.S.
law of general application. Under current New York law, the maximum rate of
interest, with some exceptions, for any loan in an amount less than $250,000 is
16% and for any loan in the amount of $250,000 or more but less than $2,500,000
is 25% per year on a simple interest basis. These limits do not apply to loans
of $2,500,000 or more.

Unless otherwise provided in the pricing supplement, all percentages
resulting from any calculation of the rate of interest on a floating rate note
will be rounded, if necessary, to the nearest one hundred-thousandth of a
percent (.0000001), with five one-millionths of a percentage point rounded
upward, and all currency amounts used in or resulting from that calculation on
floating rate notes will be rounded to the nearest one-hundredth of a unit,
with five one-thousandths of a unit rounded upward.

S-9
<PAGE>

When interest rates are reset

The rate of interest on each floating rate note will be reset daily,
weekly, monthly, quarterly, semi-annually or annually. This interest reset
period will be specified in the pricing supplement. The day on which a new
interest rate takes effect for a floating rate note is called an "interest
reset date". Unless otherwise provided in the pricing supplement, the interest
reset dates will be as follows:

<TABLE>
<CAPTION>
For floating rate
notes that reset: Interest will be reset on:
--------------------- ------------------------------------------------------
<C> <S>
.daily each business day
. weekly, except each Wednesday
Treasury rate
notes
. weekly, in the
case of Treasury
rate notes each Tuesday, except as provided below
.monthly the third Wednesday of each month
.quarterly the third Wednesday of each March, June, September and
December
.semi-annually the third Wednesday of the two months specified in the
pricing supplement
.annually the third Wednesday of the month specified in the
pricing supplement
</TABLE>

In the following circumstances the interest rate will not reset:

. During the period from its issue date to its first interest reset date, a
floating rate note will bear interest at its initial interest rate.

. During the ten days immediately preceding maturity of a floating rate note,
the interest rate that was in effect on the tenth day before maturity will
remain in effect without being reset.

Unless otherwise provided in the pricing supplement, if any interest reset
date for any floating rate note would otherwise fall on a day that is not a
business day, the next business day will be the interest reset date. However,
if this would cause the interest reset date for a LIBOR note to fall in the
next month, the interest reset date will be the preceding business day. If an
auction for Treasury bills falls on a day that is an interest reset date for
Treasury rate notes, the interest reset date for those notes will be the next
business day.

Periods to which interest rates apply

Unless otherwise provided in the pricing supplement, the interest payable
on each interest payment date or at maturity for floating rate notes will be
the amount of interest accrued during the previous interest period, which will
be the period:

. from, and including, the issue date or the last interest payment date to
which interest has been paid;

. to, but excluding, the interest payment date or date of maturity.

In the case of a floating rate note on which interest is reset daily or
weekly, interest payable on each interest payment date will be the amount of
interest accrued:

. from, and including, the issue date or from, and excluding, the last date
to which interest has been paid;

. to, and including, the regular record date immediately preceding that
interest payment date; except that

. at maturity, the interest payable will include interest accrued to, but
excluding, the date of maturity.

Accrued interest for a floating rate note will be calculated by multiplying
the principal amount of the note by an accrued interest factor. The accrued
interest factor will be computed by adding the interest factors calculated for
each day in the interest period or from the last date from which accrued
interest is being calculated. In the case of all floating rate notes other than
Treasury rate notes, the interest factor for each day is computed by dividing
the interest rate applicable on that day

S-10
<PAGE>

by 360. In the case of Treasury rate notes, the interest rate is divided by the
actual number of days in the year.

The interest rate applicable to an interest reset date will be determined
based on the interest determination date occurring before the interest reset
date. This interest rate will apply to the interest reset date and each
succeeding day until the next interest reset date.

. The interest determination date pertaining to an interest reset date for CD
rate notes, commercial paper rate notes, federal funds rate notes, CMT rate
notes and prime rate notes will be the second business day preceding that
interest reset date.

. The interest determination date pertaining to an interest reset date for a
LIBOR note will be the second London banking day preceding that interest
reset date unless the specified currency is pounds sterling, in which case
the interest determination date will be the interest reset date.

. The interest determination date pertaining to an interest reset date for
EURIBOR notes will be the second euro business day preceding the interest
reset date.

The interest determination date pertaining to an interest reset date for a
Treasury rate note will be the day on which Treasury bills of the applicable
index maturity are auctioned during the week in which the interest
determination date falls. Treasury bills are normally sold at auction on Monday
of each week, unless that day is a legal holiday, in which case the auction is
normally held on the following Tuesday. Sometimes, however, the auction is held
on the preceding Friday. In that event, that Friday will be the interest
determination date pertaining to the interest reset date occurring in the
following week. If the auction is held on a day that would otherwise be an
interest reset date, then the interest reset date will instead be the first
business day following the auction date.

The "calculation date", on which the interest rate that takes effect on a
particular interest reset date will be determined for notes other than LIBOR
notes and EURIBOR notes, will be the earlier of the following:

. the tenth calendar day after the interest determination date or the next
business day after the tenth day, if the tenth day is not a business day;
and

. the business day immediately preceding the interest payment date or the
maturity, whichever is the day on which the next payment of interest will
be due.

When interest is payable

Unless otherwise provided in the pricing supplement, interest will be
payable at maturity and on the following interest payment dates:

<TABLE>
<CAPTION>
For floating rate
notes that reset: Interest will be paid on:
--------------------- ------------------------------------------------------
<C> <S>
. daily, weekly or the third Wednesday of each month or the third
monthly Wednesday of March, June, September and December of
each year, as specified in the pricing supplement
. quarterly the third Wednesday of March, June, September and
December of each year
. semi-annually the third Wednesday of the two months specified in the
pricing supplement
. annually the third Wednesday of the month specified in the
pricing supplement
</TABLE>

Any payment of principal, premium, if any, and interest required to be made
on a floating rate note on a date of maturity that is not a business day will
be made on the next business day. However, if this would cause the date for a
LIBOR note payment to fall in the next month, payment will be made on the
preceding business day. In each of these cases,

S-11
<PAGE>

payments will be made with the same legal effect as if made on the date of
maturity, and no additional interest will accrue as a result of any delayed
payment.

The calculation agent

Unless otherwise provided in the pricing supplement, State Street Bank and
Trust Company will be the calculation agent, which calculates the interest on
floating rate notes. The holder of a floating rate note may request that the
calculation agent provide it with the interest rate then in effect, as well as
the interest rate that will become effective on the next interest reset date,
if it has been determined.

Base rates that may apply to floating rate notes

CD rate. CD rate notes will bear interest at a base rate equal to the CD
rate and adjusted by the spread or spread multiplier, if any, specified in the
certificates representing the CD rate notes and in the pricing supplement.

The CD rate for any interest determination date will be determined as
follows:

. The CD rate will be the rate on that date for negotiable U.S. dollar
certificates of deposit having the applicable index maturity published by
the Board of Governors of the Federal Reserve System in "Statistical
Release H.15(519), Selected Interest Rates" or any successor publication
of the Board of Governors of the Federal Reserve System, which we call
"H.15(519)", under the heading "CDs (Secondary Market)".

. If that rate is not published in H.15(519) by 3:00 p.m., New York City
time, on the relevant calculation date, then the CD rate will be the rate
described above as published in the daily update of H.15(519) available
through the worldwide-web site of the Board of Governors of the Federal
Reserve System, at http://www.bog.frb.us/ releases/h15/update or any
successor site or publication, which we call "H.15 daily update", or
another recognized electronic source used for displaying that rate, under
the heading "CDs (Secondary Market)".

. If the rate described above is not published in H.15(519), H.15 daily
update or another recognized electronic source by 3:00 p.m., New York City
time, on the relevant calculation date, unless the calculation is made
earlier and the rate is available from one of those sources at that time,
the CD rate will be calculated by the calculation agent and will be the
arithmetic mean of the secondary market offered rates as of 10:00 a.m.,
New York City time, on that interest determination date, of three leading
nonbank dealers in negotiable U.S. dollar certificates of deposit in The
City of New York selected by the calculation agent for negotiable U.S.
dollar certificates of deposit of major United States money center banks
with a remaining maturity closest to the applicable index maturity.

. If fewer than three dealers selected by the calculation agent are quoting
as described above, the rate of interest in effect for the applicable
period will be the rate of interest in effect on that interest
determination date.

CD rate notes, like other notes, are not deposit obligations of a bank and
are not insured by the Federal Deposit Insurance Corporation.

Commercial paper rate. Commercial paper rate notes will bear interest at a
base rate equal to the commercial paper rate and adjusted by the spread or
spread multiplier, if any, specified in the certificates representing the
commercial paper rate notes and in the pricing supplement.

The commercial paper rate for any interest determination date will be
determined as follows:

. The commercial paper rate will be the money market yield, as described
below, on that date of the rate for commercial paper having the applicable
index maturity, as that rate is published by the

S-12
<PAGE>

Board of Governors of the Federal Reserve System in H.15(519) under the
heading "Commercial Paper--Nonfinancial".

. If that rate is not published in H.15(519) by 3:00 p.m., New York City
time, on the relevant calculation date, then the commercial paper rate will
be the rate, for the relevant interest determination date, for commercial
paper having the index maturity specified in the pricing supplement, as
published in H.15 daily update or any other recognized electronic source
used for displaying that rate, under the heading "Commercial Paper--
Nonfinancial".

. If that rate is not published in H.15(519), H.15 daily update or another
recognized electronic source by 3:00 p.m., New York City time, on the
relevant calculation date, unless the calculation is made earlier and the
rate is available from one of those sources at that time, the commercial
paper rate will be the money market yield of the arithmetic mean of the
offered rates as of 11:00 a.m., New York City time, on the relevant
interest determination date of three leading U.S. dollar commercial paper
dealers in The City of New York selected by the calculation agent for U.S.
dollar commercial paper of the applicable index maturity, placed for
industrial issuers whose bond rating is "AA," or the equivalent, from a
nationally recognized rating agency.

. If fewer than three dealers selected by the calculation agent are quoting
offered rates as described above, the rate of interest in effect for the
applicable period will be the rate of interest in effect on that interest
determination date.

The money market yield will be a yield expressed as a percentage and
calculated in accordance with the following formula:

D X 360
----------- X 100
money market yield = 360-(D X M)

where "D" refers to the applicable annual rate for commercial paper quoted on a
bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the applicable index period.

Federal funds rate notes. Federal funds rate notes will bear interest at a
base rate equal to the federal funds rate and adjusted by the spread or spread
multiplier, if any, specified in the certificates representing the federal
funds rate notes and in the pricing supplement.

The federal funds rate for any interest determination date will be
determined as follows:

. The federal funds rate will be the rate on that date for U.S. dollar
federal funds as published by the Board of Governors of the Federal Reserve
System in H.15(519) under the heading "Federal Funds (Effective)", as that
rate is displayed on page 120 or any replacement page of the display on
Bridge Telerate, Inc. or any successor service. We refer to specified pages
of this kind as "Telerate pages".

. If that rate is not displayed on Telerate page 120 at 3:00 p.m., New York
City time, on the relevant calculation date, unless the calculation is made
earlier and the rate is available from that source at that time, then the
federal funds rate will be the rate described above as published in H.15
daily update, or another recognized electronic source used for displaying
that rate, under the heading "Federal Funds (Effective)".

. If that rate is not displayed on Telerate page 120 and is not published in
H.15(519), H.15 daily update or another recognized electronic source by
3:00 p.m., New York City time, on the relevant calculation date, unless the
calculation is made earlier and the rate is available from one of those
sources at that time, the federal funds rate for that interest
determination date will be calculated by the calculation agent and will be
the arithmetic mean of the rates for the last transaction in overnight,
U.S. dollar federal funds arranged, before 9:00 a.m., New York City time,
on the relevant interest

S-13
<PAGE>

determination date, by three leading brokers of U.S. dollar federal funds
transactions in The City of New York selected by the calculation agent.

. If fewer than three brokers selected by the calculation agent are quoting
as described above, the rate of interest in effect for the applicable
period will be the rate of interest in effect on that interest
determination date.

LIBOR notes. LIBOR notes will bear interest at a base rate equal to
"LIBOR", which means the London interbank offered rate for deposits in U.S.
dollars or any other currency, as specified in the pricing supplement. We refer
to this currency as the "index currency". The index currency may be U.S.
dollars or any other currency, and will be U.S. dollars unless another currency
is specified in the pricing supplement. In addition, the applicable LIBOR base
rate will be adjusted by the spread or spread multiplier, if any, specified in
the certificates representing the LIBOR notes and in the pricing supplement.

LIBOR will be determined in the following manner:

. LIBOR will be either:

--the offered rate appearing on Telerate page 3750 or any replacement page
or pages on which London interbank rates of major banks for the relevant
index currency are displayed, which we call the "Telerate LIBOR page"; or

--the arithmetic mean of the offered rates appearing on the display on the
Reuters Monitor Money Rates Service, or any successor service, on the
page designated as "LIBO" or any replacement page or pages on which
London interbank rates of major banks for the relevant index currency are
displayed, which we call the "Reuters screen LIBOR page", unless that
page by its terms cites only one rate, in which case that rate;

in either case, as of 11:00 a.m., London time, on the relevant interest
determination date, for deposits of the relevant index currency having the
relevant index maturity beginning on the relevant interest reset date. The
pricing supplement will indicate the index currency, the index maturity and the
reference page that apply to a particular LIBOR note. If no reference page is
specified in the pricing supplement, the Telerate LIBOR page will apply to the
LIBOR note.

. If Telerate LIBOR page applies and the rate described above does not appear
on that page, or if Reuters screen LIBOR page applies and fewer than two of
the rates described above appears on that page or no rate appears on any
page on which only one rate normally appears, then LIBOR will be determined
on the basis of the rates, at approximately 11:00 a.m., London time, on the
relevant interest determination date, at which deposits of the following
kind are offered to prime banks in the London interbank market by four
major banks in that market selected by the calculation agent: deposits of
the index currency having the relevant index maturity, beginning on the
relevant interest reset date, and in an amount that, in the calculation
agent's judgment, is representative of a single transaction in the relevant
market at the relevant time. We call an amount as described in the
preceding sentence a "representative amount". The calculation agent will
request the principal London office of each of these banks to provide a
quotation of its rate. If at least two quotations are provided, LIBOR for
the relevant interest determination date will be the arithmetic mean of the
quotations.

. If fewer than two quotations are provided as described above, LIBOR for the
relevant interest determination date will be the arithmetic mean of the
rates for loans of the following kind to leading European banks quoted, at
approximately 11:00 a.m., in the principal financial center for the country
of the index currency, on that interest determination date, by three major
banks in that financial center selected by the calculation agent: loans of
the index currency having the relevant index

S-14
<PAGE>

maturity, beginning on the relevant interest determination date, and in a
representative amount.

. If fewer than three banks selected by the calculation agent are quoting as
described above, the rate of interest in effect for the applicable period
will be the rate of interest in effect on that interest determination date.

EURIBOR notes. EURIBOR notes will bear interest at a base rate equal to the
interest rate for deposits in euros designated as "EURIBOR" and sponsored
jointly by the European Banking Federation and ACI--the Financial Market
Association, or any company established by the joint sponsors to compile and
publish that rate. In addition, the EURIBOR base rate will be adjusted by the
spread or spread multiplier, if any, specified in the pricing supplement.

EURIBOR for any interest determination date will be determined as follows:

. EURIBOR will be the offered rate for deposits in euros having the index
maturity specified in the pricing supplement, beginning on the second euro
business day after the relevant interest determination date, as that rate
appears on Telerate page 248 as of 11:00 a.m., Brussels time, on the
relevant interest determination date.

. If the rate described above does not appear on Telerate page 248, EURIBOR
will be determined on the basis of the rates, at approximately 11:00 a.m.,
Brussels time, on the relevant interest determination date, at which euro
deposits having the relevant index maturity, beginning on the relevant
interest reset date, and in a representative amount are offered:

. to prime banks in the interbank market of the region comprised of the
member states of the European Economic and Monetary Union that, as of
that time, have adopted a single currency in accordance with the
Treaty on European Union of February 1992; and

. by the principal office in that region of each of four major banks in
that market selected by the calculation agent.

The calculation agent will request the principal office of each of these
banks in that region to provide a quotation of its rate. If at least two
quotations are provided, EURIBOR for the relevant interest determination
date will be the arithmetic mean of the quotations.

. If fewer than two quotations are provided as described above, EURIBOR for
the relevant interest determination date will be the arithmetic mean of the
rates for loans of euros having the relevant index maturity, beginning on
the relevant interest reset date, and in a representative amount to leading
banks in the region described above quoted, at approximately 11:00 a.m.,
Brussels time on that interest determination date, by three major banks in
that region selected by the calculation agent.

Treasury rate notes. Treasury rate notes will bear interest at a base rate
equal to the treasury rate and adjusted by the spread or spread multiplier, if
any, specified in the certificates representing the treasury rate notes and in
the pricing supplement.

The treasury rate for any interest determination date will be determined as
follows:

. The treasury rate will be the rate for the auction held on that interest
determination date of treasury bills having the applicable index maturity
as that rate appears on Telerate page 56 or 57 under the heading
"Investment Rate".

. If the rate described above does not appear on either page at 3:00 p.m.,
New York City time, on the relevant calculation date, unless the
calculation is made

S-15
<PAGE>

earlier and the rate is available from that source at that time, the
treasury rate will be the "bond equivalent yield", as described below, of
the rate, for the relevant interest determination date, for the type of
treasury bill described above, as published in H.15 daily update, or
another recognized electronic source used for displaying that rate, under
the heading "U.S. Government Securities/Treasury Bills/Auction High".

. If the auction rate described in the prior paragraph is not so announced by
3:00 p.m., New York City time, on the relevant calculation date, or if no
such auction is held for the relevant week, then the treasury rate will be
the bond equivalent yield of the rate, for the relevant interest
determination date, for treasury bills of the kind described above, as
published in H.15(519) under the heading "U.S. Government
Securities/Treasury Bills/Secondary Market".

. If the rate described in the prior paragraph is not published in H.15(519)
by 3:00 p.m., New York City time, on the relevant calculation date, then
the treasury rate will be the rate, for the relevant interest determination
date and treasury bills of the kind described above, as published in H.15
daily update, or another recognized electronic source used for displaying
that rate, under the heading "U.S. Government Securities/Treasury
Bills/Secondary Market".

. If the rate described in the prior paragraph is not published in H.15 daily
update or another recognized electronic source by 3:00 p.m., New York City
time, on the relevant calculation date, unless the calculation is made
earlier and the rate is available from one of those sources at that time,
then the treasury rate will be calculated by the calculation agent and will
be the bond equivalent yield of the arithmetic mean of the secondary market
bid rates, as of approximately 3:30 p.m., New York City time, on that
interest determination date, of three primary U.S. government securities
dealers in New York City selected by the calculation agent for the issue of
treasury bills with a remaining maturity closest to the applicable index
maturity.

. If fewer than three dealers selected by the calculation agent are quoting
bid rates as described above, the interest rate for the applicable period
will be the interest rate in effect on that interest determination date.

When we say "bond equivalent yield", we mean a yield expressed as a
percentage and calculated in accordance with the following formula:

D X N
-----------
bond equivalent yield = 360-(D X M) X 100

where "D" refers to the annual rate for treasury bills quoted on a bank
discount basis and expressed as a decimal, "N" refers to 365 or 366, as the
case may be, and "M" refers to the actual number of days in the applicable
interest reset period.

CMT rate notes. CMT rate notes will bear interest at a base rate equal to
the CMT rate and adjusted by the spread or spread multiplier, if any, specified
in the certificates representing the CMT rate notes and in the pricing
supplement.

The CMT rate for any interest determination date will be determined as
follows:

. The CMT rate will be the rate displayed on the designated CMT Telerate
page, as defined on the next page, under the caption "Treasury Constant
Maturities . . .

S-16
<PAGE>

Federal Reserve Board Release H.15 . . . Mondays Approximately 3:45 P.M.",
under the column for the "designated CMT maturity index", as defined on
the next page, for (1) if the designated CMT Telerate page is 7051 or any
successor page, the rate for the relevant interest determination date and
(2) if the designated CMT Telerate page is 7052 or any successor page, the
weekly or monthly average, as specified in the pricing supplement, for the
week that ends immediately before the week in which the relevant interest
determination date occurs, or for the month that ends immediately before
the month in which the relevant interest determination date occurs, as
applicable.

. If that rate is not displayed at 3:00 p.m., New York City time, on the
relevant calculation date, then the CMT rate for that interest
determination date will be the applicable treasury constant maturity rate
for the designated CMT maturity index and for either the relevant interest
determination date or the weekly or monthly average, as applicable, as
published in H.15(519).

. If that rate is not published in H.15(519) by 3:00 p.m., New York City
time, on the relevant calculation date, then the CMT rate on that interest
determination date will be such treasury constant maturity rate, or other
United States treasury rate, for the designated CMT maturity index for the
relevant interest determination date as may then be published by either
the Board of Governors of the Federal Reserve System or the United States
Department of the Treasury that the calculation agent determines to be
comparable to the rate formerly displayed on the designated CMT Telerate
page and published in H.15(519).

. If the rate described in the prior paragraph is not published by 3:00
p.m., New York City time, on the relevant calculation date, then the CMT
rate on that interest determination date will be calculated by the
calculation agent and will be the yield to maturity of the arithmetic mean
of the following secondary market offered rates for the most recently
issued direct, noncallable, fixed rate obligations of the United States,
which we call "treasury notes", with an original maturity of approximately
the designated CMT maturity index and a remaining term to maturity of not
less than that designated CMT maturity index minus one year: the offered
rates, as of approximately 3:30 p.m., New York City time, on that interest
determination date, of three primary U.S. government securities dealers in
The City of New York selected by the calculation agent, which may include
the agents or their affiliates. In selecting these offered rates, the
calculation agent will request quotations from five of these primary
dealers and will disregard the highest quotation--or, if there is
equality, one of the highest--and the lowest quotation--or, if there is
equality, one of the lowest.

. If the calculation agent is unable to obtain three quotations of the kind
described in the prior paragraph, the CMT rate on that interest
determination date will be calculated by the calculation agent and will be
the yield to maturity of the arithmetic mean of the following secondary
market offered rates for treasury notes with an original maturity longer
than the designated CMT maturity index, with a remaining term to maturity
closest to the designated CMT maturity index and in a representative
amount: the offered rates, as of approximately 3:30 p.m., New York City
time, on that interest determination date of three primary U.S. government
securities dealers in The City of New York selected by the calculation
agent. In selecting these offered rates, the calculation agent will
request quotations from five of these primary dealers and will disregard
the highest quotation--or, if there is equality, one of the highest--and
the lowest quotation--or, if there is equality, one of the lowest.

. If three or four, and not five, of these primary dealers are quoting as
described above, then the CMT rate will be based on the arithmetic mean of
the offered

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rates so obtained and neither the highest nor the lowest of these quotes
will be disregarded.

. If fewer than three primary dealers selected by the calculation agent are
quoting rates as described above, the rate of interest in effect for the
applicable period will be the rate of interest in effect on that interest
determination date.

The "designated CMT Telerate page" means the Telerate page specified in
the pricing supplement that displays treasury constant maturities as reported
in H.15(519). If no page is specified in the pricing supplement, the
designated CMT Telerate page will be 7052. If Telerate page 7052 applies but
the pricing supplement does not specify whether the weekly or monthly average
applies, the weekly average will apply.

The "designated CMT maturity index" means the original period to maturity
of the U.S. Treasury securities--either 1, 2, 3, 5, 7, 10, 20 or 30 years--
specified in the pricing supplement. If no maturity is specified in the
pricing supplement, the designated CMT maturity index will be 2 years.

Prime rate notes. Prime rate notes will bear interest at a base rate equal
to the prime rate and adjusted by the spread or spread multiplier, if any,
specified in the certificates representing the prime rate notes and in the
pricing supplement.

The prime rate with respect to any interest reset date will be determined
as follows:

. The prime rate will be the rate, for the relevant interest determination
date, published in H.15(519) under the heading "Bank Prime Loan".

. If that rate is not published in H.15(519) by 3:00 p.m., New York City
time, on the relevant calculation date, then the prime rate will be the
rate, for the relevant interest determination date, as published in H.15
daily update or another recognized electronic source used to display that
rate, under the heading "Bank Prime Loan".

. If the rate described above is not published in H.15(519), H.15 daily
update or another recognized electronic source by 3:00 p.m., New York City
time, on the relevant calculation date, unless the calculation is made
earlier and the rate is available from one of those sources at that time,
then the prime rate will be determined by the calculation agent and will
be the arithmetic mean of the rates of interest publicly announced by each
bank that appears on the display on the "USPRIME 1" page on the Reuters
Monitor Money Rates Service or any successor service, or any other page
that may replace the USPRIME 1 page on that service, for the purpose of
displaying prime rates or base lending rates of major United States banks,
which we call the "Reuters screen USPRIME 1 page", as that bank's prime
rate or base lending rate, as of 11:00 a.m., New York City time, on the
relevant interest determination date.

. If fewer than four of these rates appear on the Reuters screen USPRIME 1
page, the prime rate with respect to that interest reset date will be
determined by the calculation agent and will be the arithmetic mean of the
prime rates or base lending rates, quoted on the basis of the actual
number of days in the year divided by a 360-day year, as of the close of
business on that interest determination date by three major banks in The
City of New York selected by the calculation agent.

. If fewer than three banks selected by the calculation agent are quoting
rates as described above, the rate of interest in effect for the
applicable period will be the rate of interest in effect on that interest
determination date.

Other base rates. We may issue floating rate notes for which interest
rates will be determined based on any other base rate or rates which we will
describe in the pricing supplement and the certificates representing the
notes.

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Currency indexed notes

Currency indexed notes, which we may offer from time to time, are notes for
which the principal amount payable at the maturity date will be based on rates
of exchange between two or more currencies. Because these rates of exchange
fluctuate, the principal amount payable with respect to any currency indexed
note at the maturity date may be higher or lower than its face amount.
Generally, this amount will be determined based on rates of exchange between
the currency or composite currency in which a currency indexed note is
denominated, which we call the "denominated currency", and another currency or
composite currency specified as the "indexed currency" in the pricing
supplement. The amount may also be determined by other methods, which we will
specify in the pricing supplement.

Unless otherwise provided in the pricing supplement, holders of currency
indexed notes will be entitled to receive a principal amount of currency
indexed notes that is greater than or less than the amount designated as the
face amount of the currency indexed notes in the pricing supplement depending
on whether, at the maturity date, the rate at which the denominated currency
can be exchanged for the indexed currency is greater than or less than the rate
of exchange designated as the "base exchange rate" in the pricing supplement.
The base exchange rate will be expressed in units of the indexed currency per
one unit of the denominated currency. This determination will be made by a
determination agent, as identified in the pricing supplement, according to the
procedures described below under "--Payment of Principal and Interest".
Information as to the relative historical value of the applicable denominated
currency against the applicable indexed currency, any exchange controls
applicable to the denominated currency or indexed currency and any special
United States federal income tax rules applicable to currency indexed notes
will be described in the pricing supplement. See "Foreign Currency Risks" for
important information about risks of an investment in currency indexed notes.

Payment of principal and interest

Unless otherwise provided in the pricing supplement, we will pay interest
in the denominated currency based on the face amount of the currency indexed
notes as described below and in the pricing supplement.

Unless otherwise provided in the pricing supplement, we will pay principal
of a currency indexed note in the denominated currency at the maturity date in
an amount equal to:

. the face amount of the currency indexed note;

. plus or minus an amount of the denominated currency determined by the
determination agent by reference to the difference between the base
exchange rate and the rate at which the denominated currency can be
exchanged for the indexed currency on the second "exchange rate day", as
defined below, before the maturity date of the currency indexed note. We
call this second exchange rate day before the maturity date the
"determination date".

The determination agent will determine this exchange rate as follows:

. The exchange rate will be the arithmetic mean of the open market spot offer
quotations for the indexed currency, that are also spot bid quotations for
the denominated currency, obtained from reference dealers in The City of
New York at 11:00 a.m., New York City time, on the determination date, for
an amount of indexed currency equal to the face amount of the currency
indexed note multiplied by the base exchange rate, in terms of the
denominated currency for settlement on the maturity date. We call this rate
of exchange, expressed in units of the indexed currency per one unit of the
denominated currency, the "spot rate".

. If quotations from the reference dealers are not available on the
determination date due to circumstances beyond our control or the control
of the determination agent, the spot rate will be determined on

S-19
<PAGE>

the basis of the most recently available quotations from the reference
dealers.

We will specify three banks or firms who will act as the reference dealers
in the pricing supplement. If any of these selected banks or firms is
unwilling or unable to provide the requested quotations, we will select, in
consultation with the determination agent, another major money center bank or
banks in The City of New York to act as a reference dealer.

Unless otherwise provided in the pricing supplement, the term "exchange
rate day" means any day which is a business day in The City of New York and,
if the denominated currency or indexed currency is any currency or composite
currency other than the U.S. dollar or euro, in the principal financial center
of the country of that denominated currency or indexed currency or, if the
denominated currency or indexed currency is euros, a euro business day, as
defined on page S-5.

The principal amount of the currency indexed notes determined by the
determination agent to be payable at the maturity date will be payable in the
manner described here and in the pricing supplement. Determinations by the
determination agent of the spot rate and the principal amount of currency
indexed notes payable at the maturity date will be final and binding on us and
on you, unless they are clearly wrong.

Unless otherwise provided in the pricing supplement:

. If the base exchange rate equals the spot rate for any currency indexed
note, then the principal amount payable at the maturity date would be
equal to the face amount of the currency indexed note.

. If the spot rate exceeds the base exchange rate, which would happen if the
denominated currency has appreciated against the indexed currency during
the term of the currency indexed note, then the principal amount payable
at the maturity date would be greater than the face amount of the currency
indexed note, up to an amount equal to twice the face amount of the
currency indexed note.

. If the spot rate is less than the base exchange rate, which would happen
if the denominated currency has depreciated against the indexed currency
during the term of the currency indexed note, but is greater than one-half
of the base exchange rate, then the principal amount payable at the
maturity date would be less than the face amount of the currency indexed
note.

. If the spot rate is less than or equal to one-half of the base exchange
rate, then the spot rate will be deemed to be one-half of the base
exchange rate and no principal amount would be payable at the maturity
date.

Unless otherwise provided in the pricing supplement, the formula that the
determination agent will use to determine the principal amount of a currency
indexed note payable at the maturity date will be as follows:

. If the spot rate exceeds or equals the base exchange rate, the principal
amount will equal:

face amount + (face amount x spot rate - base exchange rate)
------------------------------
spot rate

. If the base exchange rate exceeds the spot rate, the principal amount,
which may never be less than zero, will equal:

face amount - (face amount x base exchange rate - spot rate)
------------------------------
spot rate

Unless otherwise provided in the pricing supplement, the maximum principal
amount payable at the maturity date with respect to a currency indexed note to
which the formulas above apply would be an amount equal to twice the face
amount, and the minimum principal amount payable would be zero.

Unless otherwise provided in the pricing supplement, the term "maturity
date" as used above also means the date of any redemption or repayment of a
currency indexed note before its stated maturity.

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<PAGE>

Other indexed notes and terms
applicable to all indexed notes

We may also issue indexed notes other than currency indexed notes, for
which interest and principal amounts may be determined by reference to the
price of one or more specified commodities, to one or more equity indices or
other indices or by other similar methods or formulas. The pricing supplement
for these indexed notes will describe the methods by which interest and
principal will be determined, any special United States federal income tax
rules applicable to indexed notes, risks associated with an investment in
indexed notes and other information relating to them.

Unless otherwise provided in the pricing supplement:

. to determine whether holders of the requisite principal amount of debt
securities outstanding under the indenture have made a demand or given a
notice or waiver or taken any other action, the outstanding principal
amount of indexed notes will be deemed to be the face amount of the notes;
and

. if the maturity of an indexed note is accelerated, the principal amount
payable to the holder upon acceleration will be determined as if the date
of acceleration were the maturity date.

Risks associated with indexed notes

An investment in indexed notes entails significant risks that are not
associated with similar investments in a conventional fixed rate or floating
rate debt security. Such risks include, without limitation, the possibility
that:

. the indices or formulas may be subject to significant changes;

. you may receive no interest, or less interest than you would have received
from a conventional fixed rate or floating rate debt security issued by us
at the same time;

. principal and/or premium, if any, may be paid at times when you did not
expect it to be paid; and

. you could lose all or a substantial portion of principal and/or premium, if
any, payable with respect to the indexed notes.

These risks depend on a number of interrelated factors, including economic,
financial and political events, over which we have no control. Also, if the
formula used to determine principal, premium, and/or interest contains a
multiplier or leverage factor, the effect of any change in the applicable
indices or formulas will be magnified. In recent years, values of certain
indices and formulas have been highly volatile, and this volatility may be
expected to continue in the future. Fluctuations in the value of any particular
index or formula that have occurred in the past are not necessarily indicative,
however, of fluctuations that may occur in the future.

Subsequent interest periods

The pricing supplement relating to each note will indicate whether we have
the option to reset the interest rate, in the case of a fixed rate note, or to
reset the spread or spread multiplier, in the case of a floating rate note. We
will not have the option to turn a fixed rate note into floating rate note, or
vice versa. A pricing supplement indicating that we have the option to reset
the interest rate, spread or spread multiplier will also provide for one or
more "optional reset dates" on which we may exercise this option. The following
procedures will then apply, unless modified in the pricing supplement.

We may exercise our option by notifying the trustee at least 50 but not
more than 60 days before an optional reset date. Not later than 40 days before
the optional reset date, the trustee will mail to the holder a reset notice
stating:

. our election to reset the interest rate, spread or spread multiplier;

. the new interest rate, spread or spread multiplier; and

. the provisions, if any, for repayment of the affected note at the option of
the holder during the period from the optional reset date to the next
optional reset date or, if

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<PAGE>

there is no next optional reset date, to the maturity date, each of which
we call a "subsequent interest period". These stated provisions will
include the dates, periods and prices at which the repayment may occur
during that subsequent interest period.

Not later than 20 days before an optional reset date for a note, we may
revoke the interest rate, spread or spread multiplier stated in the reset
notice and establish a higher one, to take effect at the same time and for the
same period, by causing the trustee to transmit notice to the holder of the
affected note. Once this notice is given, it cannot be revoked. All notes for
which the interest rate or spread or spread multiplier is reset on an optional
reset date will bear the higher interest rate, spread or spread multiplier,
whether or not tendered for repayment as described below.

If we elect to reset the interest rate or the spread or spread multiplier
of a note, the holder will have the option to elect repayment on any optional
reset date at a price equal to the principal amount of the note plus any
accrued interest to the optional reset date. The holder must follow the
procedures set forth below under "--Redemption and repayment" for optional
repayment, except that:

. the period for delivery of the note or notification to the trustee will be
at least 25 but not more than 35 days before the optional reset date; and

. a holder who has tendered a note for repayment pursuant to a reset notice
may, by written notice to the trustee, revoke the tender for repayment
until the close of business on the tenth day before the optional reset
date.

If you hold your interest in a note indirectly, either because it is a
global note or because you otherwise hold it in street name, you should check
with the institution through which you hold your interest in the note to
determine how these provisions will apply to you. See "Legal Ownership" in the
prospectus for more information about procedures applicable to indirect
interests in notes.

Extension of maturity

The pricing supplement relating to each note will indicate whether we have
the option to extend the maturity date for one or more extension periods up to
but not beyond the final maturity date given in the pricing supplement. The
following procedures will apply whenever we have this option, unless modified
in the pricing supplement.

We may exercise our option by notifying the trustee at least 50 but not
more than 60 days before the maturity date in effect before the exercise of the
option. No later than 40 days prior to that original maturity date, the trustee
will mail to the holder of the note an extension notice stating:

. our election to extend the maturity;

. the new maturity date;

. the interest rate, spread or spread multiplier applicable to the extension
period; and

. the provisions, if any, for repayment of the affected note at the option of
the holder during the extension period, including the dates, periods and
prices at which repayment may occur.

The maturity date of a note will be extended automatically when the trustee
transmits an extension notice to the holder. The note will have the same terms
as before, except as modified by the extension notice or as provided in the
next paragraph.

Not later than 20 days before the original maturity date of a note, we may
revoke the interest rate, spread or spread multiplier we gave in the extension
notice and establish a higher interest rate, spread or spread multiplier for
the extension period, by causing the trustee to transmit notice to the holder
of the note. Once this notice is given, it cannot be revoked. All notes with
respect to which the maturity date is extended will bear the new, higher
interest rate, spread or spread multiplier for the extension period, whether or
not tendered for repayment as described below.

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<PAGE>

If we elect to extend the maturity date of a note, the holder will have the
option to elect repayment on the original maturity date at a price equal to the
principal amount plus any accrued interest to that date. The holder must follow
the procedures set forth below under "--Redemption and repayment" for optional
repayment, except that:

. the period for delivery of the note or notification to the trustee will be
at least 25 but not more than 35 days before the original maturity date;
and

. a holder who has tendered a note for repayment pursuant to an extension
notice may, by written notice to the trustee, revoke the tender for
repayment until the close of business on the tenth day before the original
maturity date.

Redemption and repayment

The pricing supplement relating to each note will indicate:

. whether the note can be redeemed before its maturity date at our option;

. if applicable, the date or dates on which it can be redeemed; and

. if applicable, the price or prices at which it can be redeemed, together
with accrued interest to the date of redemption.

Unless otherwise provided in the pricing supplement, the notes will not be
entitled to the benefits of any sinking fund. We may redeem any of the notes
that are redeemable and remain outstanding either in whole or from time to time
in part, upon not less than 30 nor more than 60 days' notice. If less than all
of the notes with like tenor and terms are to be redeemed, the trustee will
select the notes to be redeemed by a method that the trustee deems fair and
appropriate.

The pricing supplement relating to each note will indicate whether it will
be repayable at the option of the holder before its maturity date. If the note
will be repayable, the pricing supplement will describe at what times the note
will be repayable and at what price or prices, together with accrued interest
to the date of repayment.

In order for a note to be repaid at the option of the holder, we must
receive the note with the form entitled "Option to Elect Repayment" on the
reverse duly completed, at least 30 days but not more than 45 days before the
repayment date, except if the pricing supplement provides otherwise. Exercise
of the repayment option by the holder of a note will be irrevocable, except in
the circumstances described above under "--Subsequent Interest Periods" and "--
Extension of Maturity". The holder of a note may exercise the repayment option
for less than the entire principal amount of the note provided that the
principal amount of the note remaining outstanding after repayment is an
authorized denomination.

Any optional redemption feature of the notes might affect their market
value. Since we would probably redeem notes when prevailing interest rates are
relatively low, holders generally will not be able to reinvest the redemption
proceeds in a comparable security at an effective interest rate as high as the
interest rate applicable to the redeemed notes.

Amortizing notes

We may from time to time offer amortizing notes, for which principal and
interest will be

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<PAGE>

payable in installments over the term of the notes. Unless otherwise provided
in the pricing supplement, interest on each amortizing note will be computed on
the basis of a 360-day year of twelve 30-day months. Payments with respect to
amortizing notes will be applied first to interest due and payable and then to
the reduction of unpaid principal. Further information concerning additional
terms and provisions of amortizing notes will be specified in the pricing
supplement, including a table of repayment information for the amortizing
notes.

Addendum and/or other provisions

Any provisions with respect to the notes, including the specification and
determination of the base rate, the calculation of the interest rate applicable
to a floating rate note, the interest payment dates, the maturity date or any
other term relating to the notes, may be modified and/or supplemented as
specified under "Other Provisions" on the face of the note, or in an addendum
relating to the note, if specified on the face of the note. Any provisions
modified or supplemented in these ways will be described in the pricing
supplement.

Book-entry notes

Global notes will be deposited with, or on behalf of, the depositary and
registered in the name of the depositary's nominee. Except as described below,
a global note may not be transferred except as a whole by the depositary to
another nominee of the depositary or to a successor of the depositary or a
nominee of the successor. Unless otherwise provided in the pricing supplement,
DTC will be the depositary.

DTC has advised us and the agents that it is:

. a limited-purpose trust company organized under the law of the State of New
York;

. a member of the Federal Reserve System;

. a "clearing corporation" within the meaning of the New York Uniform
Commercial Code; and

. a "clearing agency" registered under the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended.

DTC was created to hold securities of its participants and to facilitate
the clearance and settlement of securities transactions among its participants
in the securities that it holds through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical
movement of securities certificates. DTC's participants include securities
brokers and dealers, including the agents, banks, including the trustee, trust
companies, clearing corporations and other organizations, some of whom own DTC.
Access to DTC's book-entry system is also available to others, including banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly. Persons who are
not participants may beneficially own securities held by DTC only through
participants.

When a global note is issued the depositary will credit the respective
principal amounts of the notes represented by the global note to the accounts
of participants on its book-entry registration and transfer system. The
accounts to be credited will be designated by the agent through which a note
was sold, or by us if we sold the note directly. Only participants or persons
that may hold interests through participants may own beneficial interests in a
global note. Ownership of beneficial interests in a global note will be shown
on, and the transfer of that ownership will be effected only through, records
maintained by the depositary, with respect to participants' interests, or by
participants or persons that may hold interests through participants, with
respect to beneficial owners' interests.

For a description of matters relating to global notes, including
restrictions on eligible holders, methods of payment, recognition of legal
ownership and exchange for notes in certificated form, see "Legal Ownership"
generally and "Legal Ownership--Global Securities" in the prospectus.

If certificated notes are issued in exchange for beneficial interests in a
global

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<PAGE>

note under the circumstances described in the prospectus, the certificated
notes will be issued in registered form only, without coupons, in denominations
of $100,000 (or another denomination we specify) and integral multiples of
$1,000 above $100,000.

IMPORTANT CURRENCY EXCHANGE INFORMATION

Purchasers are required to pay for notes in the specified currency.
Currently, there are limited facilities in the United States for conversion of
U.S. dollars into foreign currencies and vice versa. Banks do not generally
offer non-U.S. dollar checking or savings account facilities in the United
States. However, if requested by a prospective purchaser of notes denominated
in a specified currency other than U.S. dollars, the agent soliciting the offer
to purchase will arrange for the conversion of U.S. dollars into the specified
currency to enable the purchaser to pay for the notes. This request must be
made on or before the fifth business day preceding the date of delivery of the
notes, or by another date selected by the agent that presents the offer to us.
The agent will make the conversion on its own terms and subject to whatever
limitations, conditions and charges it has established in accordance with its
regular foreign exchange practice. The purchasers of the notes will bear all
costs of exchange.

FOREIGN CURRENCY RISKS

Governing law and judgments

The notes will be governed by and construed in accordance with the law of
the State of New York. Courts in the United States have not customarily
rendered judgments for money damages denominated in any currency other than the
U.S. dollar. The Judiciary Law of the State of New York provides, however, that
judgment rendered in an action based upon an obligation denominated in a
currency other than U.S. dollars will be rendered in the foreign currency of
the underlying obligation and converted into U.S. dollars at a rate of exchange
prevailing on the date of the entry of the judgment or decree.

Exchange rates and exchange controls

An investment in notes that are denominated in a specified currency other
than U.S. dollars, which we call "foreign currency notes", entails significant
risks that are not associated with a similar investment in a security
denominated in U.S. dollars. Similarly, an investment in a currency indexed
note entails significant risks that are not associated with a similar
investment in non-indexed notes. Among these risks are:

. the possibility of significant market changes in rates of exchange between
currencies;

. the possibility of significant changes in rates of exchange between
currencies resulting from official redenomination of a currency; and

. the possibility of the imposition or modification of foreign exchange
controls by either the U.S. or foreign governments.

These risks generally depend on factors over which we have no control, such
as economic and political events, and on the supply of and demand for the
relevant currencies. In recent years, rates of exchange between the U.S. dollar
and some foreign currencies have been volatile, and this volatility may be
expected in the future. Fluctuations in any particular exchange rate that have
occurred in the past are not necessarily indicative, however, of fluctuations
in the rate that may occur during the term of any foreign currency note.
Depreciation of the currency specified in a foreign currency note against the
U.S. dollar would result in a decrease in the effective yield of that note
below its coupon rate and could result in a loss to the investor, on a U.S.
dollar basis. Similarly, depreciation of the denominated currency of a currency
indexed note against the applicable indexed currency would result in the
principal amount payable on the note at the maturity date being less than the
face amount. This, in turn, would decrease the effective yield of the note
below its stated interest rate and could also result in a loss to the investor.
See "Description of Notes--

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<PAGE>

Currency indexed notes" for further information about the amounts payable with
respect to currency indexed notes.

If a specified currency is officially redenominated, our obligations with
respect to payments on notes denominated in that currency will immediately be
deemed to provide for payment of the amount of redenominated currency that
represents the amount of our obligations immediately before the
redenomination. The notes do not provide for any adjustment to any amount
payable under the notes as a result of any change in the value of a specified
currency relative to any other currency due solely to fluctuations in exchange
rates.

Governments may impose exchange controls that could affect exchange rates
as well as the availability of a specified currency at an interest payment
date or at maturity of a foreign currency note. There can be no assurances
that exchange controls will not restrict or prohibit payments of principal,
premium, if any, or interest in any specified currency other than U.S.
dollars. Even if there are no actual exchange controls, it is possible that at
an interest payment date or at maturity of any particular foreign currency
note, the specified currency for that foreign currency note would not be
available to us due to circumstances beyond our control. If that happens, we
will make required payments in U.S. dollars on the basis described below in
"--Payment currency".

Unless otherwise provided in the pricing supplement, the notes will not be
listed on any securities exchange. Accordingly, there can be no assurance as
to the liquidity of the trading market for foreign currency notes or currency
indexed notes.

. This prospectus supplement and the accompanying prospectus do not describe
all the risks of an investment in notes denominated in a specified
currency other than U.S. dollars or an investment in currency indexed
notes.

. We disclaim any responsibility to advise you of these risks as they exist
at the date of this prospectus supplement or as these risks may change
from time to time.

. You should consult your own financial and legal advisors as to the risks
entailed by an investment in notes denominated in specified currencies
other than U.S. dollars or an investment in currency indexed notes.

. Foreign currency notes and currency indexed notes are not an appropriate
investment for investors who are unsophisticated with respect to foreign
currency transactions.

Payments on foreign currency notes made in a specified currency other than
U.S. dollars will be made from an account with a bank located outside the
United States. See "--Payment currency" for information about circumstances in
which these payments may be made in U.S. dollars.

Unless otherwise provided in the pricing supplement, notes denominated in
a specified currency other than U.S. dollars will not be sold in or to
residents of the country issuing the specified currency. The information in
this prospectus supplement is directed to prospective purchasers who are
United States residents, and we disclaim any responsibility to advise
prospective purchasers who are residents of countries other than the United
States with respect to any matters that may affect the purchase, holding or
receipt of payments of principal, premium, if any, or interest on the notes.
These persons should consult their own counsel with regard to these matters.

Pricing supplements relating to foreign currency notes or currency indexed
notes will contain information concerning historical exchange rates for the
applicable specified currency against the U.S. dollar or other relevant
currency, a description of the currency or currencies and any exchange
controls affecting the currency or currencies. The information concerning
exchange rates is furnished as a matter of information only and

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should not be regarded as indicative of the range of or trends in fluctuations
in currency exchange rates that may occur in the future.

Payment currency

Except as described below, if payment on a foreign currency note is
required to be made in a foreign currency and that currency:

. is unavailable due to the imposition of exchange controls or other
circumstances beyond our control, or

. is no longer used by the government of the country issuing it, or

. is no longer used for the settlement of transactions by public institutions
of or within the international banking community,

then all payments due on that due date will be made in U.S. dollars. The amount
payable will be converted into U.S. dollars at a rate determined by the
exchange rate agent on the basis of the most recently available market exchange
rate or as otherwise indicated in a pricing supplement.

The exchange rate agent will make all of these determinations in its sole
discretion, except to the extent expressly provided in this prospectus
supplement or a pricing supplement that any determination requires our
approval. Determinations of the exchange rate agent will be conclusive for all
purposes and binding on holders of the notes, unless they are clearly wrong,
and the exchange rate agent will have no liability for them.

UNITED STATES TAX CONSIDERATIONS

The following discussion summarizes certain U.S. federal income tax
considerations that may be relevant to holders of Notes. Except for the
discussion under "Non-U.S. persons" and "Information reporting and backup
withholding", the discussion generally applies only to holders of Notes that
are U.S. holders. You will be a U.S. holder if you are an individual who is a
citizen or resident of the United States, a U.S. domestic corporation, or any
other person that is subject to U.S. federal income tax on a net income basis
in respect of an investment in the notes. This summary applies to you only if
you own your notes as capital assets. It does not address considerations that
may be relevant to you if you are an investor to which special tax rules apply,
such as a bank, tax-exempt entity, insurance company, dealer in securities or
currencies, trader in securities that elects mark-to-market treatment, person
that will hold notes as a position in a "straddle" or conversion transaction,
or as part of a "synthetic security" or other integrated financial transaction
or a person whose "functional currency" is not the U.S. dollar. Any special
U.S. federal income tax considerations relevant to a particular issue of notes,
including any indexed notes, will be discussed in the pricing supplement.

This summary is based on the United States tax laws, regulations, rulings
and decisions in effect or available on the date of this prospectus supplement.
All of the foregoing are subject to change, and any change may apply
retroactively and could affect the continued validity of this summary.

You should consult your tax adviser about the tax consequences of holding
notes, including the relevance to your particular situation of the
considerations discussed below, as well as of state, local or other tax laws.

Payments or accruals of interest

Payments or accruals of "qualified stated interest", as defined below, on a
note will be taxable to you as ordinary interest income at the time that you
receive or accrue these amounts in accordance with your regular method of tax
accounting. If you use the cash method of tax accounting and you receive
payments of interest according to the terms of a note in a currency other than
U.S. dollars, which we call a "foreign currency", the amount of interest income
you will realize will be the U.S. dollar value of the foreign currency payment
based on the exchange rate in effect on the date you receive the payment
regardless

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of whether you convert the payment into U.S. dollars. If you are an accrual-
basis U.S. holder, the amount of interest income you will realize will be based
on the average exchange rate in effect during the interest accrual period (or
with respect to an interest accrual period that spans two taxable years, at the
average exchange rate for the partial period within the taxable year).
Alternatively, as an accrual-basis U.S. holder you may elect to translate all
interest income on foreign currency-denominated notes at the spot rate on the
last day of the accrual period (or the last day of the taxable year, in the
case of an accrual period that spans more than one taxable year) or on the date
that you receive the interest payment if that date is within five business days
of the end of the accrual period. If you make this election you must apply it
consistently to all debt instruments from year to year and you cannot change
the election without the consent of the Internal Revenue Service. If you use
the accrual method of accounting for tax purposes you will recognize foreign
currency gain or loss on the receipt of a foreign currency interest payment if
the exchange rate in effect on the date the payment is received differs from
the rate applicable to a previous accrual of that interest income. This foreign
currency gain or loss will be treated as ordinary income or loss, but generally
will not be treated as an adjustment to interest income received on the note.

Purchase, sale and retirement of notes

Initially, your tax basis in a note generally will equal the cost of the
note to you. Your basis will increase by any amounts that you are required to
include in income under the rules governing original issue discount and market
discount, and will decrease by the amount of any amortized premium and any
payments other than qualified stated interest made on the note. The rules for
determining these amounts are discussed below. If you purchase a note that is
denominated in a foreign currency, the cost to you, and therefore generally
your initial tax basis, will be the U.S. dollar value of the foreign currency
purchase price on the date of purchase calculated at the exchange rate in
effect on that date. If the foreign currency note is traded on an established
securities market and you are a cash-basis taxpayer (or if you are an accrual-
basis taxpayer that makes a special election), then you will determine the U.S.
dollar value of the cost of the note by translating the amount of the foreign
currency that you paid for the note at the spot rate of exchange on the
settlement date of your purchase. The amount of any subsequent adjustments to
your tax basis in a note in respect of foreign currency-denominated original
issue discount, market discount and premium will be determined in the manner
described below. If you convert U.S. dollars into a foreign currency and then
immediately use that foreign currency to purchase a note, you generally will
not have any taxable gain or loss as a result of the conversion or purchase.

When you sell or exchange a note, or if a note is retired, you generally
will recognize gain or loss equal to the difference between the amount you
realize on the transaction (less any accrued qualified stated interest, which
will be taxable in the manner described above) and your tax basis in the note.
If you sell or exchange a note for a foreign currency, or receive foreign
currency on the retirement of a note, the amount you will realize for U.S. tax
purposes generally will be the dollar value of the foreign currency that you
receive calculated at the exchange rate in effect on the date the foreign
currency note is disposed of or retired. If you dispose of a foreign currency
note that is traded on an established securities market and you are a cash-
basis U.S. holder (or if you are an accrual-basis holder that makes a special
election), then you will determine the U.S. dollar value of the amount realized
by translating the amount at the spot rate of exchange on the settlement date
of the sale, exchange or retirement.

The special election available to you if you are an accrual-basis taxpayer
in respect of the purchase and sale of foreign currency notes traded on an
established securities market, which is discussed in the two preceding
paragraphs, must be applied consistently to all debt instruments from year to
year and cannot be changed without the consent of the Internal Revenue Service.

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Except as discussed below with respect to market discount and foreign
currency gain or loss, the gain or loss that you recognize on the sale,
exchange or retirement of a note generally will be long-term capital gain or
loss if you have held the note for more than one year. Net long-term capital
gain recognized by an individual U.S. holder generally will be subject to a
maximum tax rate of 20%. The ability of U.S. holders to offset capital losses
against ordinary income is limited.

Despite the foregoing, the gain or loss that you recognize on the sale,
exchange or retirement of a foreign currency note generally will be treated as
ordinary income or loss to the extent that the gain or loss is attributable to
changes in exchange rates during the period in which you held the note. This
foreign currency gain or loss will not be treated as an adjustment to interest
income that you receive on the note.

Original issue discount

If we issue notes at a discount from their stated redemption price at
maturity, and the discount is equal to or more than the product of one-fourth
of one percent (0.25%) of the stated redemption price at maturity of the notes
multiplied by the number of full years to their maturity, the notes will be
"original issue discount notes". The difference between the issue price and the
stated redemption price at maturity of the notes will be the "original issue
discount". The "issue price" of the notes will be the first price at which a
substantial amount of the notes are sold to the public, that is, excluding
sales of notes to underwriters, placement agents, wholesalers, or similar
persons. The "stated redemption price at maturity" will include all payments
under the notes other than payments of qualified stated interest. The term
"qualified stated interest" generally means stated interest that is
unconditionally payable in cash or property, other than debt instruments issued
by UTC, at least annually during the entire term of a note at a single fixed
interest rate or, subject to certain conditions, based on one or more interest
indices.

If you invest in original issue discount notes, the special tax accounting
rules for original issue discount obligations provided by the Internal Revenue
Code and relevant Treasury regulations generally will apply to you. You should
be aware that, as described in greater detail below, if you invest in an
original issue discount note you generally will be required to include original
issue discount in ordinary gross income for U.S. federal income tax purposes as
it accrues, before you receive the cash attributable to that income.

In general, and regardless of whether you use the cash or the accrual
method of tax accounting, if you are the holder of an original issue discount
note with a maturity greater than one year, you will be required to include in
ordinary gross income the sum of the "daily portions" of original issue
discount on that note for all days during the taxable year that you own the
note. The daily portions of original issue discount on an original issue
discount note are determined by allocating to each day in any accrual period a
ratable portion of the original issue discount allocable to that period.
Accrual periods may be any length and may vary in length over the term of an
original issue discount note, so long as no accrual period is longer than one
year and each scheduled payment of principal or interest occurs on the first or
last day of an accrual period. If you are the initial holder of the note, the
amount of original issue discount on an original issue discount note allocable
to each accrual period is determined by:

. multiplying the "adjusted issue price", as defined below, of the note at
the beginning of the accrual period by a fraction, the numerator of which
is the annual yield to maturity of the note and the denominator of which is
the number of accrual periods in a year; and

. subtracting from that product the amount, if any, payable as qualified
stated interest allocable to that accrual period.

In the case of an original issue discount note that is a floating rate note,
both the "annual yield to maturity" and the qualified stated interest will be
determined for these purposes

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as though the note will bear interest in all periods at a fixed rate generally
equal to the rate that would be applicable to interest payments on the note on
its date of issue or, in the case of some floating rate notes, the rate that
reflects the yield that is reasonably expected for the note. Additional rules
may apply if interest on a floating rate note is based on more than one
interest index. The "adjusted issue price" of an original issue discount note
at the beginning of any accrual period will generally be the sum of its issue
price, including any accrued interest, and the amount of original issue
discount allocable to all prior accrual periods, reduced by the amount of all
payments other than any qualified stated interest payments on the note in all
prior accrual periods. All payments on an original issue discount note, other
than qualified stated interest, will generally be viewed first as payments of
previously accrued original issue discount to the extent of the previously
accrued discount, with payments considered made from the earliest accrual
periods first, and then as a payment of principal. The "annual yield to
maturity" of a note is the discount rate, appropriately adjusted to reflect the
length of accrual periods, that causes the present value on the issue date of
all payments on the note to equal the issue price. As a result of this
"constant yield" method of including original issue discount income, the
amounts you will be required to include in your gross income if you invest in
an original issue discount note denominated in U.S. dollars will generally be
less in the early years and greater in the later years than amounts that would
be includible on a straight-line basis.

You generally may make an irrevocable election to include in income your
entire return on a note, that is, the excess of all remaining payments to be
received on the note, including payments of qualified stated interest, over the
amount you paid for the note, under the constant yield method described above.
For notes purchased at a premium or bearing market discount in your hands, if
you make this election you will also be deemed to have made the election to
amortize premium or to accrue market discount in income currently on a constant
yield basis. See "Premium and market discount" below for a discussion of this
election.

In the case of an original issue discount note that is also a foreign
currency note, you should determine the U.S. dollar amount includible as
original issue discount for each accrual period by (1) calculating the amount
of original issue discount allocable to each accrual period in the foreign
currency using the constant yield method, and (2) translating the foreign
currency amount so received at the average exchange rate in effect during that
accrual period (or, with respect to an interest accrual period that spans two
taxable years, at the average exchange rate for each partial period).
Alternatively, you may translate the foreign currency amount so derived at the
spot rate of exchange on the last day of the accrual period (or the last day of
the taxable year, for an accrual period that spans two taxable years) or at the
spot rate of exchange on the date of receipt, if that date is within five
business days of the last day of the accrual period, provided that you have
made the election described under the caption "Payments or accruals of
interest" above. Because exchange rates may fluctuate, if you are the holder of
an original issue discount note that is also a foreign currency note you may
recognize a different amount of original issue discount income in each accrual
period than would be the case if you were the holder of an otherwise similar
original issue discount note denominated in U.S. dollars. Upon the receipt of
an amount attributable to original issue discount (whether in connection with a
payment of an amount that is not qualified stated interest or the sale or
retirement of the original issue discount note), you will recognize ordinary
income or loss measured by the difference between the amount received
(translated into U.S. dollars at the exchange rate in effect on the date of
receipt or on the date of disposition of the original issue discount note, as
the case may be) and the amount accrued, using the exchange rate applicable to
that previous accrual.

If you purchase an original issue discount note outside of the initial
offering at a cost less than its "remaining redemption amount", or if

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you purchase an original issue discount note in the initial offering at a price
other than the note's issue price, you will also generally be required to
include in gross income the daily portions of original issue discount,
calculated as described above. However, if you acquire an original issue
discount note at a price greater than its adjusted issue price, you will be
entitled to reduce your periodic inclusions of original issue discount to
reflect the premium paid over the adjusted issue price. The remaining
redemption amount for an original issue discount note is the total of all
future payments to be made on the note other than qualified stated interest.

Original issue discount notes may be redeemable prior to maturity, either
at the option of UTC or at the option of the holder, or may have special
repayment or interest rate reset features, as indicated in the pricing
supplement. Rules that differ from the general rules discussed above may apply
to original issue discount notes with these features. If you purchase original
issue discount notes with these features, you should carefully examine the
pricing supplement and consult your tax adviser about their treatment since the
tax consequences of original issue discount will depend, in part, on the
particular terms and features of the notes.

Short-term notes

The rules described above will also generally apply to original issue
discount notes with maturities of one year or less, which we call "short-term
notes", but with some modifications.

First, the original issue discount rules treat none of the interest on a
short-term note as qualified stated interest, but treat a short-term note as
having original issue discount. Thus, all short-term notes will be original
issue discount notes. Except as noted below, if you are a cash-basis holder of
a short-term note and you do not identify the short-term note as part of a
hedging transaction you will generally not be required to accrue original issue
discount currently, but you will be required to treat any gain realized on a
sale, exchange or retirement of the note as ordinary income to the extent this
gain does not exceed the original issue discount accrued with respect to the
note during the period you held the note. You may not be allowed to deduct all
of the interest paid or accrued on any indebtedness incurred or continued to
purchase or carry a short-term note until the maturity of the note or its
earlier disposition in a taxable transaction. Notwithstanding the foregoing, if
you are a cash-basis U.S. holder of a short-term note you may elect to accrue
original issue discount on a current basis, in which case the limitation on the
deductibility of interest described above will not apply. A U.S. holder using
the accrual method of tax accounting and some cash method holders (including
banks, securities dealers, regulated investment companies and certain trust
funds) generally will be required to include original issue discount on a
short-term note in gross income on a current basis. Original issue discount
will be treated as accruing for these purposes on a ratable basis or, at the
election of the holder, on a constant yield basis based on daily compounding.

Second, regardless of whether you are a cash- or accrual-basis holder, if
you are the holder of a short-term note you can elect to accrue any
"acquisition discount" with respect to the note on a current basis. Acquisition
discount is the excess of the remaining redemption amount of the note at the
time of acquisition over the purchase price. Acquisition discount will be
treated as accruing ratably or, at the election of the holder, under a constant
yield method based on daily compounding. If you elect to accrue acquisition
discount, the original issue discount rules will not apply.

Finally, the market discount rules described below will not apply to short-
term notes.

As described above, special redemption features may apply to the notes, as
indicated in the pricing supplement. These features may affect the
determination of whether a note has a maturity of one year or less and thus is
a short-term note. If you purchase notes with these features, you should
carefully examine the pricing supplement and consult your tax adviser about
these features.

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Premium and market discount

If you purchase a note at a cost greater than the note's remaining
redemption amount, you will be considered to have purchased the note at a
premium, and you may elect to amortize the premium as an offset to interest
income, using a constant yield method, over the remaining term of the note. If
you make this election, it generally will apply to all debt instruments that
you hold at the time of the election, as well as any debt instruments that you
subsequently acquire. In addition, you may not revoke the election without the
consent of the Internal Revenue Service. If you elect to amortize the premium
you will be required to reduce your tax basis in the note by the amount of the
premium amortized during your holding period. The original issue discount rules
described above will not apply to original issue discount notes purchased at a
premium. In the case of premium on a foreign currency note, you should
calculate the amortization of the premium in the foreign currency. Amortization
deductions attributable to a period reduce interest payments in respect of that
period, and therefore are translated into U.S. dollars at the rate that you use
for those interest payments. Exchange gain or loss will be realized with
respect to amortized premium on a foreign currency note based on the difference
between the exchange rate computed on the date or dates the premium is
amortized against interest payments on the note and the exchange rate on the
date when the holder acquired the note. For a U.S. holder that does not elect
to amortize premium, the amount of premium will be included in your tax basis
when the note matures or is disposed of. Therefore, if you do not elect to
amortize premium and you hold the note to maturity, you generally will be
required to treat the premium as capital loss when the note matures.

If you purchase a note at a cost that is lower than the note's remaining
redemption amount (or in the case of an original issue discount note, the
note's adjusted issue price), by 0.25% or more of the remaining redemption
amount (or adjusted issue price), multiplied by the number of remaining whole
years to maturity, the note will be considered to bear "market discount" in
your hands. In this case, any gain that you realize on the disposition of the
note generally will be treated as ordinary interest income to the extent of the
market discount that accrued on the note during your holding period. In
addition, you could be required to defer the deduction of a portion of the
interest paid or accrued on any indebtedness that you incurred or continued to
purchase or carry the note. In general, market discount will be treated as
accruing ratably over the term of the note, or, at your election, under a
constant yield method. You must accrue market discount on a foreign currency
note in the specified currency. The amount that you will be required to include
in income in respect of accrued market discount will be the U.S. dollar value
of the accrued amount, generally calculated at the exchange rate in effect on
the date that you dispose of the note.

You may elect to include market discount in gross income currently as it
accrues on either a ratable or constant yield basis, in lieu of treating a
portion of any gain realized on a sale of the note as ordinary income. If you
elect to include market discount on a current basis, the interest deduction
deferral rule described above will not apply. If you do make an election of
this kind, it will apply to all market discount debt instruments that you
acquire on or after the first day of the first taxable year to which the
election applies. The election may not be revoked without the consent of the
Internal Revenue Service. Any accrued market discount on a foreign currency
note that is currently includible in income will be translated into U.S.
dollars at the average exchange rate for the accrual period or portion of the
accrual period within the holder's taxable year.

Indexed notes and other notes providing for contingent payment

Special rules govern the tax treatment of debt obligations that provide for
contingent payments, which we call "contingent debt obligations". These rules
generally require accrual of interest income on a constant yield basis in
respect of contingent debt obligations at a yield determined at the time of
issuance of the obligation, and may require adjustments to these accruals when
any contingent payments

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are made. We will provide a detailed description of the tax considerations
relevant to U.S. holders of any contingent debt obligations in the pricing
supplement.

Non-U.S. persons

The following summary applies to you if you are not a United States person
for U.S. federal income tax purposes. You are a United States person, and
therefore this summary does not apply to you, if you are:

. a citizen or resident of the United States or its territories, possessions
or other areas subject to its jurisdiction,

. a corporation, partnership or other entity organized under the laws of the
United States or any political subdivision,

. an estate, the income of which is subject to United States federal income
taxation regardless of its source or

. a trust if (i) a United States court is able to exercise primary
supervision over the trust's administration and (ii) one or more United
States persons have the authority to control all of the trust's substantial
decisions.

If you are not a United States person, the interest income that you derive
in respect of the notes generally will be exempt from United States federal
income taxes, including withholding tax, provided that:

. you do not actually or constructively own 10% or more of the combined
voting power of all classes of stock of UTC and you are not a controlled
foreign corporation that is related to UTC through stock ownership, and

. the beneficial owner provides a statement signed under penalties of perjury
that includes its name and address and certifies that it is not a United
States person in compliance with applicable requirements (or, with respect
to payments made after December 31, 2000, satisfies certain documentary
evidence requirements for establishing that it is not a United States
person).

If you are not a United States person, any gain you realize on a sale or
exchange of notes generally will be exempt from United States federal income
tax, including withholding tax, unless:

. your gain is effectively connected with your conduct of a trade or business
in the United States or

. you are an individual holder and are present in the United States for 183
days or more in the taxable year of the sale, and either (1) your gain is
attributable to an office or other fixed place of business that you
maintain in the United States or (2) you have a tax home in the United
States.

United States Federal estate tax will not apply to a note held by an
individual holder who at the time of death is not a citizen or resident of the
United States, if the holder did not at the time of death actually or
constructively own 10% or more of the combined voting power of all classes of
stock of UTC, and, at the time of the holder's death, payments of interest on
the note would not have been effectively connected with the conduct by the
holder of a trade or business in the United States.

Information reporting and backup withholding

The paying agent must file information returns with the United States
Internal Revenue Service in connection with note payments made to certain
United States persons. If you are a United States person, you generally will
not be subject to a 31% United States backup withholding tax on such payments
if you provide your taxpayer identification number to the paying agent. You may
also be subject to information reporting and backup withholding tax
requirements with respect to the proceeds from a sale of the notes. If you are
not a United States person, in order to avoid information reporting and backup
withholding tax requirements you may have to comply with certification
procedures to establish that you are not a United States person.

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SUPPLEMENTAL PLAN OF DISTRIBUTION

UTC and Goldman, Sachs & Co., Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Salomon Smith Barney Inc., whom we call the
"agents", have entered into a distribution agreement with respect to the notes.
Subject to certain conditions, the agents have agreed to use their reasonable
best efforts to solicit purchases of the notes. UTC has the right to accept
offers to purchase notes and may reject any proposed purchase of the notes. The
agents may also reject any offer to purchase notes. We will pay the agents a
commission on any notes sold through the agents. Unless a greater amount has
been specified in the pricing supplement, the commission will range from 0.125%
to 0.750% of the principal amount of the notes, depending on the maturity of
the notes.

We may also sell notes to the agents who will purchase the notes as
principals for their own accounts. Any sale to an agent as principal will be
made at a discount equal to the agent commissions stated on the cover page of
this prospectus supplement if no other discount is agreed. Any notes the agents
purchase as principal may be resold at the market price or at other prices
determined by the agents at the time of resale. UTC may also sell notes
directly on its own behalf. No commissions will be paid on notes sold directly
by UTC.

The agents may resell any notes they purchase to other brokers or dealers
at a discount which may include all or part of the discount the agents received
from UTC. The agents will purchase the notes at a price equal to 100% of the
principal amount less a discount. Unless otherwise stated the discount will
equal the applicable commission on an agency sale of notes of the same
maturity. If all the notes are not sold at the initial offering price, the
agents may change the offering price and the other selling terms.

The notes are a new issue of securities with no established trading market
and will not be listed on a securities exchange. No assurance can be given as
to the liquidity of the trading market for the notes.

In connection with the offering, the agents may purchase and sell notes in
the open market. These transactions may include short sales, stabilizing
transactions and purchases to cover positions created by short sales. Short
sales involve the sale by the agents of a greater number of notes than they are
required to purchase in the offering. Stabilizing transactions consist of
certain bids or purchases made for the purpose of preventing or retarding a
decline in the market price of the notes while the offering is in progress.

The agents may also impose a penalty bid. This occurs when a particular
agent repays to the agents a portion of the underwriting discount received by
it because the agents have repurchased notes sold by or for the account of that
agent in stabilizing or short covering transactions.

These activities by the agents may stabilize, maintain or otherwise affect
the market price of the notes. As a result, the price of the notes may be
higher than the price that might otherwise exist in the open market. If these
activities are commenced, they may be discontinued by the agents at any time.
These transactions may be effected in the over-the-counter market or otherwise.

The agents, whether acting as agents or principals, may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933. We have agreed
to indemnify the several agents against liabilities, including liabilities
under the Securities Act of 1933.

The agents may sell to dealers who may resell to investors and the agents
may pay all or part of the discount or commission they receive from UTC to the
dealers. These dealers may be deemed to be "underwriters" within the meaning of
the Securities Act.

Unless otherwise indicated in the pricing supplement, the purchase price of
the notes will be required to be paid in immediately available funds in New
York, New York.

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Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
and Salomon Smith Barney Inc. may be customers of, engage in transactions with,
and perform services for, UTC in the ordinary course of business.

VALIDITY OF NOTES

The validity of the notes will be passed upon for us by Cleary, Gottlieb,
Steen & Hamilton, New York, New York, and for the agents by Sullivan &
Cromwell, New York, New York. The opinions of Cleary, Gottlieb, Steen &
Hamilton and Sullivan & Cromwell will be conditioned upon, and subject to,
assumptions regarding future actions required to be taken by us and by the
trustee in connection with the issuance and sale of any particular note, the
specific terms of notes and other matters which may affect the validity of
notes but which cannot be ascertained on the date of their opinions.

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$1,000,000,000

[LOGO FOR UNITED TECHNOLOGIES APPEARS HERE]

Debt Securities, Debt Warrants,
Currency Warrants and Stock-Index Warrants

-----------

United Technologies Corporation intends to offer from time to time debt
securities, debt warrants, currency warrants and stock-index warrants. United
Technologies Corporation will receive an aggregate amount of up to
$1,000,000,000 from the sales of the debt securities and warrants. The debt
securities and warrants may be offered together or separately and in one or
more series, in amounts, at prices and on other terms to be determined at the
time of the offering and described for you in an accompanying prospectus
supplement.

United Technologies Corporation may sell the debt securities and warrants
directly or to or through underwriters or dealers, and also to other purchasers
or through agents. The names of any underwriters or agents that are included in
a sale of debt securities or warrants to you, and any applicable commissions or
discounts, will be stated in an accompanying prospectus supplement.

-----------

Neither the Securities and Exchange Commission nor any other regulatory body
has approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.

-----------

Prospectus dated July , 1999.
<PAGE>

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that we filed with the
SEC utilizing a "shelf" registration process. Under this shelf process, we may
sell any combination of the debt securities and warrants described in this
prospectus in one or more offerings. From the sales of the debt securities and
warrants we will receive an aggregate amount of up to $1,000,000,000 (which is
the aggregate issue price of all warrants issued, the principal face amount of
all debt securities issued at their principal face amount and the issue price
rather than the principal amount of any debt securities issued at original
issue discount and the exercise price of any debt securities issuable upon the
exercise of a warrant to purchase debt securities). This prospectus provides
you with a general description of the debt securities and warrants we may
offer. Each time we sell debt securities or warrants, we will provide one or
more prospectus supplements, attached to the front of this prospectus, that
will contain specific information about the terms of that offering. Those terms
may vary from the terms described in this prospectus. Thus, the summary
descriptions of the debt securities and warrants in this prospectus are subject
to, and qualified by reference to, the descriptions of the particular terms of
any series of the securities contained in any related prospectus supplements.
The prospectus supplements may also add, update or change other information
contained in this prospectus. Before you invest in a particular issue of debt
securities or warrants, you should read both this prospectus and any related
prospectus supplements together with additional information described under the
heading "Where You Can Find More Information".

UNITED TECHNOLOGIES

United Technologies Corporation and its consolidated subsidiaries provide
high technology products to aerospace and building systems customers throughout
the world. United Technologies Corporation and its consolidated subsidiaries
conduct their business within four principal operating segments. The operating
units of United Technologies Corporation and its consolidated subsidiaries are
grouped based upon the operating segment in which they participate. The units
participating in each operating segment and their respective principal products
are as follows:

. Otis offers a wide range of elevators, escalators, moving walks and
shuttle systems and related installation, maintenance and repair
services; and modernization products and services for elevators and
escalators.

. Carrier provides heating, ventilating and air conditioning (HVAC)
equipment for commercial, industrial and residential buildings; HVAC
replacement parts and services; building controls; commercial,
industrial and transport refrigeration equipment; and aftermarket
service and components.

. Pratt & Whitney provides large and small commercial and military
turbofan (jet) and turboprop engines, spare parts and product support;
specialized engine maintenance and overhaul and repair services for
airlines, government and private fleets; and rocket engines and space
propulsion systems and industrial gas turbines.

. Flight Systems is made up of Sikorsky and Hamilton Standard. Sikorsky
offers military and commercial helicopters and maintenance services.
Hamilton Standard offers engine and flight controls; propellers;
environmental controls systems and space life support systems.

Until recently, United Technologies Corporation conducted its business
through a fifth operating segment. The business of this segment, which was
conducted through UT Automotive, manufactured automotive electrical and
electronic components, automotive trim systems and insulation and acoustical
materials and systems. On May 4, 1999, United Technologies Corporation
completed the sale of

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<PAGE>

its UT Automotive unit to Lear Corporation. United Technologies Corporation's
financial statements for the three year period ended December 31, 1998, have
been restated to reflect UT Automotive as a discontinued operation. These
restated financial statements have been filed in United Technologies
Corporation's Current Report on Form 8-K filed on June 11, 1999.

On June 10, 1999, United Technologies Corporation completed the acquisition
of Sundstrand Corporation. Sundstrand Corporation was merged with a wholly
owned subsidiary of United Technologies Corporation, which was renamed Hamilton
Sundstrand Corporation. Hamilton Sundstrand Corporation is a leader in the
design and manufacture of proprietary, technology based components and
subsystems for aerospace and industrial markets. Hamilton Sundstrand
Corporation and United Technologies Corporation's Hamilton Standard division
are part of the Flight Systems operating segment.

For further information on the acquisition and the sale described in this
section, including important pro forma financial information, please see our
Current Reports on Form 8-K dated April 14, 1999, June 11, 1999 and June 18,
1999 which are incorporated by reference in this prospectus.

United Technologies Corporation was incorporated in Delaware in 1934.
Unless the context otherwise requires, "UTC", "we", "us" or "our" means United
Technologies Corporation. UTC's principal executive offices are located at
United Technologies Building, One Financial Plaza, Hartford, Connecticut,
06101, telephone (860) 728-7000.

RATIO OF EARNINGS TO FIXED CHARGES

<TABLE>
<CAPTION>
Three Months Years Ended December 31,
Ended ---------------------------------------------------------------------------------------
March 31, 1999 1998 1997 1996 1995 1994
- -------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
6.54 7.40 6.75 5.32 4.65 3.51
</TABLE>

For purposes of computing the ratio of earnings to fixed charges, earnings
are divided by fixed charges. Earnings represent the sum of income from
continuing operations before income taxes and minority interests for UTC and
its subsidiaries plus fixed charges, minus interest capitalized, plus
amortization of interest capitalized. Fixed charges represent interest paid or
accrued on indebtedness of UTC and its consolidated subsidiaries (including
interest capitalized) plus one-third (the proportion deemed representative of
the interest factor) of rents. The ratios of earnings to fixed charges set
forth above reflect UT Automotive as a discontinued operation.

The pro-forma ratio of earnings to fixed charges for the quarter ended
March 31, 1999, reflects the sale of UT Automotive to Lear Corporation, the
acquisition of Sundstrand, interest related to the issuance of long-term and
medium-term debt and the use of $906 million of the proceeds from the sale to
fund a part of the acquisition price, as if these transactions had occurred on
January 1, 1999.

<TABLE>
<CAPTION>
United Technologies
Pro Forma Quarter
Ended March 31,
1999
-------------------
<S> <C>
Fixed Charges:
Interest expense $ 80
Interest capitalized 4
One-third of rents 21
----
Total Fixed Charges $105
====
Earnings:
Income from continuing operations before income taxes and
minority interests $484
Fixed charges per above 105
Less: interest capitalized (4)
----
101
Amortization of interest capitalized 7
----
Total Earnings $592
====
Ratio of Earnings to Fixed Charges 5.64
====
</TABLE>

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<PAGE>

USE OF PROCEEDS

Except as otherwise provided in an accompanying prospectus supplement, the
net proceeds from the sale of the debt securities and warrants described in
this prospectus will be added to our general funds and will be used for our
general corporate purposes and those of our consolidated subsidiaries, which
may include acquisitions or repurchases of our stock.

From time to time, we may engage in additional public or private financings
of a character and amount which we may deem appropriate.

LEGAL OWNERSHIP

Street Name and Other Indirect Holders

Investors who hold debt securities or warrants in accounts at banks or
brokers will generally not be recognized by us as holders of those debt
securities or warrants. When we refer to the "holders" of debt securities or
warrants, we mean only the actual legal holders of the debt securities or
warrants, as we explain further below under the heading "--The Term "Holder' as
Used in This Prospectus and Elsewhere". Holding debt securities or warrants in
accounts at banks or brokers is called holding in "street name." If you hold
debt securities or warrants in street name, we will recognize only the bank or
broker, or the financial institution the bank or broker uses to hold debt
securities or warrants, as a holder. These intermediary banks, brokers and
other financial institutions pass along principal, interest and other payments
on the debt securities or warrants, either because they agree to do so in their
customer agreements or because they are legally required to. If you hold debt
securities or warrants in street name you should check with your own
institution to find out:

. How it handles payments and notices with respect to debt securities or
warrants;

. Whether it imposes fees or charges;

. How it would handle voting if ever required;

. How and when you should notify it to exercise on your behalf any
rights or options that may exist under the debt securities or
warrants;

. Whether and how you can instruct it to send you debt securities or
warrants registered in your own name so you can be a direct holder as
described below; and

. How it would pursue rights under the debt securities or warrants if
there were a default or other event triggering the need for holders to
act to protect their interests.

Direct Holders

Our obligations, as well as the obligations of the trustee, any warrant
agent and any third parties employed by us, the trustee or any warrant agent,
run only to persons who are registered as holders of debt securities or
warrants, except as may be specifically provided for in a warrant agreement,
warrant certificate or other contract governing the debt securities or
warrants. As noted above, we do not have obligations to you if you hold in
street name or through other indirect means, either because you choose to hold
debt securities or warrants in that manner or because the debt securities or
warrants are issued in the form of "global securities" as described below. For
example, once we make payment to the registered holder, we have no further
responsibility for the payment even if that holder is legally required to pass
the payment along to you as a street name customer but does not do so.

Global Securities

A global security is a special type of indirectly held debt security or
warrant. If we choose to issue debt securities or warrants in the form of
global securities, the ultimate beneficial owners can only be indirect holders.
We do this by requiring that the global security be registered in the name of a
financial institution we select and by requiring that the debt securities or
warrants included in the

4
<PAGE>

global security not be transferred to the name of any other direct holder
unless the special circumstances described below occur. The financial
institution that acts as the sole direct holder of the global security is
called the "depositary". Any person wishing to own a debt security or warrant
must do so indirectly by virtue of an account with a broker, bank or other
financial institution that in turn has an account with the depositary. The
prospectus supplement or pricing supplement indicates whether your series of
debt securities or warrants will be issued only as global securities.

As an indirect holder, your rights relating to a global security will be
governed by the account rules of your financial institution and of the
depositary, as well as general laws relating to securities transfers. We do
not recognize you as a holder of debt securities or warrants and instead deal
only with the depositary that holds the global security.

You should be aware that if debt securities or warrants are issued only in
the form of global securities:

. you cannot have debt securities or warrants registered in your own
name;

. you cannot receive physical certificates for your interest in the debt
securities or warrants;

. you will be a street name holder and must look to your own bank or
broker for payments on the debt securities or warrants and protection
of your legal rights relating to the debt securities or warrants;

. you may not be able to sell interests in the debt securities or
warrants to some insurance companies and other institutions that are
required by law to own their debt securities or warrants in the form
of physical certificates;

. the depositary's policies will govern payments, transfers, exchange
and other matters relating to your interest in the global security.
We, the trustee and any warrant agent have no responsibility for any
aspect of the depositary's actions or for its records of ownership
interests in the global security. We, the trustee and any warrant
agent also do not supervise the depositary in any way; and

. the depositary will require that interests in a global security be
purchased or sold within its system using same-day funds for
settlement.

In a few special situations described later, the global security will
terminate and interests in it will be exchanged for physical certificates
representing debt securities or warrants. After that exchange, the choice of
whether to hold debt securities or warrants directly or in street name will be
up to you. You must consult your bank or broker to find out how to have your
interests in debt securities or warrants transferred to your name, so that you
will be a direct holder.

Unless we specify otherwise in the prospectus supplement or pricing
supplement, the special situations for termination of a global security are:

. When the depositary notifies us that it is unwilling, unable or no
longer qualified to continue as depositary and we do not or cannot
appoint a successor depositary within 90 days;

. When we notify the trustee that we wish to terminate the global
security; or

. When an event of default on the debt securities has occurred and has
not been cured. (Defaults are discussed later under "Description of
Debt Securities--Events of Default").

The prospectus supplement may also list additional situations for
terminating a global security that would apply only to the particular series
of debt securities or warrants covered by the prospectus supplement. When a
global security terminates, the depositary (and not us, the trustee or any
warrant agent) is responsible for deciding the names of the institutions that
will be the initial direct holders.

5
<PAGE>

The Term "Holder" as Used in This
Prospectus and Elsewhere

In the descriptions of the debt securities and warrants included in this
prospectus and any attached prospectus supplement, when we refer to the
"holder" of a given debt security or warrant as being entitled to specified
rights or payments, or being permitted to take specified actions, we are in all
cases referring to the actual legal holder of the debt security or warrant.
While you will be the holder if you hold a certificated security registered in
your name, more often than not the holder will actually be either the broker,
bank or other financial institution where you have your street name account,
or, in the case of a global security, the depositary. This means that if you
are an indirect holder, you will need to coordinate with the institution
through which you hold your interest in a debt security or warrant in order to
determine how the provisions involving holders described in this prospectus and
any prospectus supplement will actually apply to you. For example, if the debt
security or warrant in which you hold a beneficial interest in street name can
be repaid at the option of the holder, you cannot redeem it yourself by
following the procedures described in the prospectus supplement. Instead, you
would need to cause the institution through which you hold your interest to
take those actions on your behalf. Your institution may have procedures and
deadlines different from or additional to those described in the prospectus
supplement relating to that debt security or warrant.

DESCRIPTION OF DEBT SECURITIES

The Indenture

As required by federal law for all notes and debentures of companies that
are publicly offered, the debt securities offered pursuant to this prospectus
are governed by a document called the "indenture". The indenture is a contract
dated as of April 1, 1990, as supplemented from time to time, between UTC and
State Street Bank and Trust Company (as successor to The Connecticut National
Bank), which acts as trustee. The indenture is an exhibit to the registration
statement. See "Where You Can Find More Information" for information on how to
obtain a copy of the indenture.

The following description of the indenture and summaries of some provisions
of the indenture do not describe every aspect of the debt securities and are
subject, and are qualified in their entirety by reference, to all the
provisions of the indenture including definitions of terms used in the
indenture. For example, in this section we use some terms that have been given
special meaning in the indenture. We describe the meaning for only the more
important terms. We also include references in parentheses to some sections of
the indenture. Whenever we refer to particular sections or defined terms of the
indenture in this prospectus or in the prospectus supplement, those sections or
defined terms are incorporated by reference here or in the prospectus
supplement.

Terms of the Debt Securities to Be Described in the Prospectus Supplement

The particular terms of each issue of debt securities, as well as any
modifications or additions to the general terms of the indenture which may be
applicable in the case of that issue of debt securities, will be described in
the related prospectus supplement. This description will include, where
applicable:

. the title of that issue of debt securities;

. any limit upon the aggregate principal amount of that issue of debt
securities;

. the percentage of the principal amount for which that issue of debt
securities will be issued;

. the date or dates on which the principal of that issue of debt
securities will be payable, or the method by which this date or these
dates will be determined or extended;

. the rate or rates (which may be fixed or variable), at which that
issue of debt securities will bear interest, if

6
<PAGE>

any, or the method by which this rate or these rates will be
determined;

. the date or dates from which any interest will accrue, or the method
by which this date or these dates will be determined, the dates on
which payment of any interest will be payable on any registered
security and the regular record dates for these interest payment dates
and the basis on which any interest will be calculated if other than
on the basis of a 360-day year of twelve 30-day months;

. the place or places where the principal, premium, if any, and
interest, if any, on that issue of debt securities will be payable;

. the place or places where that issue of debt securities may be
surrendered for exchange, and notices or demands to or upon UTC in
respect of debt securities may be served and any registered securities
may be surrendered for registration of transfer;

. the period or periods within which, the price or prices at which, the
currency, currencies, currency unit or units or composite currencies
in which, and the other terms and conditions upon which, that issue of
debt securities may be redeemed in whole or in part, at the option of
UTC;

. the obligation, if any, of UTC to redeem, repay or purchase that issue
of debt securities pursuant to any sinking fund or analogous provision
or at the option of a holder of debt securities and the period or
periods within which, the price or prices at which, the currency,
currencies, currency unit or units or composite currencies in which,
and the other terms and conditions upon which, that issue of debt
securities will be redeemed, repaid or purchased, in whole or in part,
pursuant to such obligation;

. the currency, currencies or currency unit or composite currency in
which that issue of debt securities will be denominated and/or in
which the principal, premium, if any, or interest on that issue of
debt securities will be payable;

. whether the amount of payments of principal, premium, if any, or
interest on that issue of debt securities may be determined with
reference to an index, formula or other method (which index, formula
or method may, without limitation, be based on one or more currencies,
currency units, composite currencies, commodities, equity indices or
other indices) and the manner in which these amounts will be
determined;

. whether UTC or a holder may elect payment of the principal, premium,
if any, or interest on that issue of debt securities in a currency,
currencies, currency unit or units or composite currency other than
that in which the debt securities are stated to be payable, and the
period or periods within which, and the terms and conditions upon
which, this election may be made, and the time and manner of
determining the exchange rate between the coin or currency,
currencies, currency unit or units or composite currency in which the
debt securities are denominated or stated to be payable and the coin
or currency, currencies, currency unit or units or composite currency
in which the debt securities are to be so payable;

. any deletions from, modifications of or additions to the events of
default or covenants of UTC with respect to that issue of debt
securities, whether or not these events of default or covenants are
consistent with the events of default or covenants contained in the
indenture as originally executed;

7
<PAGE>

. whether the provisions of Article Fourteen of the indenture described
under "--Defeasance and Covenant Defeasance" apply to that issue of
debt securities and any change to those provisions that apply to that
issue of debt securities;

. provisions, if any, granting special rights to the holders of that
issue of debt securities if any specified events occur;

. the designation of any security registrars, paying agents,
depositaries or exchange rate agents for that issue of debt
securities;

. whether that issue of debt securities is to be issuable as registered
securities, bearer securities or both, whether any debt securities of
that issue are to be issuable initially in temporary global form and
whether any debt securities of that issue are to be issuable in
permanent global form with or without coupons and, if so, whether
beneficial owners of interests in any permanent global debt security
may exchange these interests for debt securities of like tenor of any
authorized form and denomination and the circumstances under which any
exchanges of this kind may occur, and whether registered securities
may be exchanged for bearer securities (if permitted by applicable
laws and regulations) and the circumstances under which and the place
or places where exchanges of this kind, if permitted, may be made;

. the person to whom any interest on any registered security will be
payable, if other than the person in whose name that debt security (or
one or more predecessor securities) is registered at the close of
business on the regular record date for the interest, the manner in
which, or the person to whom, any interest on any bearer security will
be payable, if otherwise than in exchange for the coupons appertaining
to the bearer security as they individually mature, and the extent to
which, or the manner in which, any interest payable on a temporary
global debt security on an interest payment date will be paid;

. if the debt securities of that issue are to be issued upon the
exercise of warrants, the time, manner and place for the debt
securities to be authenticated and delivered;

. whether and under what circumstances UTC will pay additional amounts
as contemplated by Section 1010 of the indenture on that issue of debt
securities to any holder who is not a United States person in respect
of any tax, assessment or governmental charge, including any
modification to the definition of "United States person" as contained
in the indenture as originally executed, and, if so, whether and on
what terms UTC will have the option to redeem the debt securities
rather than pay additional amounts;

. the manner in which principal, premium, if any, and interest, if any,
will be payable;

. if applicable, a discussion of United States federal income tax,
accounting or other special considerations;

. the manner in which debt securities of that issue will be
transferable; and

. any other terms, conditions, rights and preferences, or limitations on
rights and preferences, of that issue of debt securities consistent
with the provisions of the indenture.

If any series of debt securities are sold for, are payable in or are
denominated in one or more foreign currencies, currency units or composite
currencies, applicable restrictions, elections, tax consequences, specific
terms and other information with respect to that series of

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<PAGE>

debt securities and such currencies, currency units or composite currencies
will be set forth in the related prospectus supplement.

We may issue debt securities other than the debt securities described in
this prospectus. There is no requirement that any other debt securities that we
issue be issued under the indenture. Thus, any other debt securities that we
issue may be issued under other indentures or documentation, containing
provisions different from those included in the indenture or applicable to one
or more issues of the debt securities described in this prospectus.

Indenture Provisions Relating to the Possible Issuance of One or More Series of
Debt Securities

The debt securities described in this prospectus and additional
unsubordinated, unsecured debt securities of UTC unlimited as to aggregate
principal amount may be issued in one or more series under the indenture
(Section 301). The debt securities described in this prospectus and any
additional debt securities so issued under the indenture are collectively
referred to in this prospectus, while a single trustee is acting for all
holders of these debt securities, as the "indenture securities." The indenture
also provides that there may be more than one trustee under the indenture, each
with respect to one or more different series of indenture securities. See "--
Trustee" for a discussion of the trustee's responsibilities if there is more
than one trustee under the indenture. At a time when two or more trustees are
acting, each with respect to only certain series of debt securities, the term
"indenture securities" as used in this prospectus will mean the one or more
series with respect to which each respective trustee is acting. If there is
more than one trustee under the indenture, the powers and trust obligations of
each trustee as described in this prospectus will extend only to the one or
more series of indenture securities for which it is trustee. The effect of the
provisions contemplating that at a particular time there might be more than one
trustee acting is that, in that event, those indenture securities (whether of
one or more than one series) for which each trustee is acting would be treated
as if issued under a separate indenture.

Each series of debt securities will constitute non-convertible, unsecured
and unsubordinated obligations of UTC and will rank on a parity with all other
unsecured and unsubordinated indebtedness of UTC, including each other series
of debt securities.

Debt securities may be issued under the indenture as original issue
discount securities to be offered and sold at a substantial discount from their
principal amount. Special federal income tax, accounting and other
considerations applicable to original issue discount securities will be
described under a separate heading in the prospectus supplement relating to any
original issue discount securities.

The indenture provides that in determining whether the holders of the
requisite principal amount of indenture securities of a series then outstanding
have given any request, demand, authorization, direction, notice, consent or
waiver under the indenture or whether a quorum is present at a meeting of
holders of indenture securities:

. the principal amount of an original issue discount security that will
be deemed to be outstanding will be the amount of the principal of
that security that would be due and payable as of the date of that
determination upon acceleration of the maturity of the security;

. the principal amount of an indenture security denominated in one or
more foreign currencies or currency units will be deemed to be the
U.S. dollar equivalent, determined on the date of original issuance of
that indenture security, of the principal amount or, in the case of an
original issue discount security, the U.S. dollar equivalent, on the
date of original issuance of the original issue discount security, of
the amount determined as provided in the immediately preceding bullet
point; and

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<PAGE>

. the principal amount that will be deemed outstanding of an indenture
security issued as an indexed security whose terms provide that its
principal amount payable at stated maturity may be more or less than
principal face amount at original issuance will be deemed to be its
principal face amount at original issuance (Section 101).

Denominations, Registration and Transfer

Debt securities of a series may be issuable solely as registered
securities, solely as bearer securities or as both registered securities and
bearer securities. The indenture also provides that debt securities of a series
may be issuable in global form. Unless otherwise indicated in the prospectus
supplement, bearer securities will have interest coupons attached (Sections
201, 203).

Unless otherwise provided in the prospectus supplement:

. registered securities denominated in U.S. dollars, other than
registered securities issued in global form, will be issued in
denominations of $1,000 and integral multiples of $1,000;

. registered securities issued in global form may be issued in any
denomination;

. bearer securities denominated in U.S. dollars, other than bearer
securities issued in global form, will be issued in denominations of
$5,000; and

. bearer securities issued in global form may be issued in any
denomination (Section 302).

Registered securities of any series will be exchangeable for other
registered securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations. If provided in the
prospectus supplement, bearer securities, with all unmatured coupons, except as
provided in the following sentence, and all matured coupons in default, of a
particular series may be converted into registered securities of the same
series of any authorized denominations and of a like aggregate principal amount
and tenor. Bearer securities surrendered in a permitted exchange for registered
securities during the period (1) on and from a regular record date and before
the opening of business at the appropriate office or agency on the relevant
interest payment date or (2) on and from a special record date and before the
opening of business at the appropriate office or agency on the related proposed
date for payment of defaulted interest, will be surrendered without the coupon
relating to that interest payment date or proposed date for payment of
interest. Interest to be paid on that interest payment date or proposed date of
payment will not be payable in respect of the registered security issued in
exchange for the bearer security. Instead, the interest will be payable only to
the holder of the coupon when due in accordance with the terms of the
indenture. Unless otherwise specified in the prospectus supplement, bearer
securities will not be issued in exchange for registered securities (Section
305).

Debt securities may be presented for exchange or conversion as provided
above, and registered securities may be presented for registration of transfer,
at the corporate trust office of the trustee or at the office of any transfer
agent designated by UTC for this purpose with respect to any series of debt
securities and referred to in the prospectus supplement. Registered securities
presented for registration of transfer must be presented with a duly executed
form of transfer. Each registered security will specify the proper form of
transfer. No service charge will be made for any transfer or exchange of the
debt securities, but UTC may require payment of a sum to cover any tax or other
governmental charge payable in connection with the transfer or exchange
(Section 305). Any transfer, conversion or exchange will be effected if the
trustee or transfer agent, as the case may be, is satisfied with the documents
of title and identity of the person making the request. If a prospectus
supplement refers to any transfer agents initially

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<PAGE>

designated by UTC with respect to any series of debt securities in addition to
the trustee, UTC may at any time rescind the designation of any of these
transfer agents or approve a change in the location through which any of these
transfer agents acts, except that:

. if debt securities of a series are issuable solely as registered
securities, UTC will be required to maintain a transfer agent in each
place of payment for that series; and

. if debt securities of a series may be issuable as both registered
securities and as bearer securities, UTC will be required to maintain
a transfer agent in a place of payment for that series located outside
the United States, in addition to the trustee.

UTC may at any time designate additional transfer agents with respect to any
series of debt securities (Section 1002).

If debt securities of any series are redeemed in part, UTC will not be
required to:

. issue, register the transfer of, exchange or convert debt securities
of any series during a period beginning at the opening of business 15
days before any debt securities of that series are selected to be
redeemed and ending at the close of business on:

(a) if debt securities of the series are issuable only as registered
securities, the day of mailing of the relevant notice of redemption;

(b) if debt securities of the series are issuable as bearer
securities, the day of the first publication of the relevant notice of
redemption; or

(c) if debt securities of the series are also issuable as registered
securities and there is no publication, the mailing of the relevant
notice of redemption; or

. register the transfer of or exchange any portion of any registered
security called for redemption, except the unredeemed portion of any
registered security being redeemed in part; or

. exchange any bearer security called for redemption, except to exchange
the bearer security for a registered security of that series and like
tenor which is simultaneously surrendered for redemption (Section
305).

Payment, Paying Agents and Exchange
Rate Agents

Unless otherwise provided in the prospectus supplement, principal, premium,
if any, and interest, if any, on bearer securities will be payable, subject to
any applicable laws and regulations, at the offices of one or more paying
agents outside the United States as UTC may designate from time to time
(Section 1002). At the option of the holder, payment on bearer securities also
may be made by transfer to an account maintained by the payee with a bank
located outside the United States (Section 307). Unless otherwise provided in
the prospectus supplement, payment of interest on any bearer securities on or
before maturity will be made only against surrender of the individual coupons
for the interest installments as the coupons mature (Section 1001). Unless
otherwise provided in the prospectus supplement, no payment with respect to any
bearer security will be made at any office or agency of UTC in the United
States or by check mailed to any address in the United States or by transfer to
an account maintained with a bank located in the United States. However,
payments of principal, premium, if any, and interest, if any, on bearer
securities payable in dollars will be made at the office of UTC's paying agent
in The City of New York if, but only if, payment of the full amount of
principal, premium, if any, and interest, if any, in dollars at all offices or
agencies outside the United States is illegal or effectively precluded by
exchange controls or other similar restrictions (Section 1002).

Unless otherwise provided in the prospectus supplement, principal, premium,
if any, and interest, if any, on registered securities will be payable at any
office or

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agency to be maintained by UTC in The City of New York, except that at the
option of UTC interest may be paid:

. by check mailed to the address of the person entitled to the interest
as that address appears in the security register; or

. by wire transfer to an account maintained by the person entitled to
the interest as specified in the security register (Sections 307 and
1002).

Unless otherwise provided in the prospectus supplement, payment of any
installments of interest on any registered security will be made to the person
in whose name the registered security is registered at the close of business
on the regular record date for interest (Section 307).

Any paying agent in the United States and any paying agent outside the
United States initially designated by UTC for the debt securities will be
named in the prospectus supplement. UTC may at any time designate additional
paying agents or rescind the designation of any paying agent or approve a
change in the office through which any paying agent acts. However:

. if debt securities of a series are issuable only as registered
securities, UTC will be required to maintain a paying agent in each
place of payment for that series;

. if debt securities of a series are also issuable as bearer securities,
UTC will be required to maintain:

(a) a paying agent in The City of New York for payments with respect
to any registered securities of that series and for payments with
respect to bearer securities of that series in the limited
circumstances described above, but not otherwise; and

(b) a paying agent in a place of payment located outside the United
States where debt securities of that series and any coupons
appertaining to the securities may be presented and surrendered for
payment; and

. if the debt securities of a series are listed on the Luxembourg Stock
Exchange or any other stock exchange located outside the United States
and that stock exchange so requires, UTC will maintain a paying agent
in Luxembourg or any other required city located outside the United
States, as the case may be, for the debt securities of that series
(Section 1002).

Unless otherwise provided in the prospectus supplement, UTC will maintain
with respect to any series of debt securities denominated or payable in one or
more foreign currencies, currency units or composite currencies, one or more
exchange rate agents to make the foreign exchange determinations as are or may
be specified in this prospectus and the prospectus supplement (Sections 313
and 1002).

All moneys paid by UTC to the trustee or a paying agent for the payment of
principal, premium, if any, or interest, if any, on any debt security which
remains unclaimed at the end of two years after the principal, premium or
interest becomes due and payable will be repaid to UTC, and the holder of the
debt security or any related coupon will thereafter look only to UTC for
payment of these amounts (Section 1003).

The Indenture Does Not Limit UTC's Indebtedness, Prevent Dividends or
Generally Prevent Highly Leveraged Transactions.

The indenture does not

. limit the amount of unsecured indebtedness which UTC or any subsidiary
may incur; or

. limit the payment of dividends by UTC or its acquisition of any of its
equity securities.

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<PAGE>

When we say "subsidiary", we mean any corporation of which at the time
of determination UTC, directly and/or indirectly through one or more
subsidiaries, owns more than 50% of the shares of voting stock (Section 101).

Except as may be included in a supplemental indenture covering a specific
series of offered debt securities and described in the related prospectus
supplement and except for the covenants described below under "--Liens", "--
Sales and Leasebacks" and "--Restriction on Merger and Sales of Assets", there
are no covenants or any other provisions which may afford holders of debt
securities protection in the event of a highly leveraged transaction which may
or may not result in a change of control of UTC.

Liens

So long as any debt securities are outstanding under the indenture:

. UTC will not itself, and will not permit any wholly-owned domestic
manufacturing subsidiary to, create, incur, issue or assume any debt
secured by any lien on any principal property owned by UTC or any
wholly-owned domestic manufacturing subsidiary; and

. UTC will not itself, and will not permit any subsidiary to, create,
incur, issue or assume any debt secured by any lien on any shares of
stock or debt of any wholly-owned domestic manufacturing subsidiary.

When we say "wholly-owned domestic manufacturing subsidiary" we mean any
subsidiary of which, at the time of determination, UTC directly and/or
indirectly owns all of the outstanding capital stock (other than directors'
qualifying shares) and which, at the time of determination, is primarily
engaged in manufacturing, except a subsidiary:

. which neither transacts any substantial portion of its business nor
regularly maintains any substantial portion of its fixed assets within
the United States; or

. which is engaged primarily in the finance business including, without
limitation, financing the operations of, or the purchase of products
which are products of or incorporate products of, UTC and/or its
subsidiaries; or

. which is primarily engaged in ownership and development of real
estate, construction of buildings, or related activities, or a
combination of the foregoing (Section 101).

When we say "debt", we mean notes, bonds, debentures or other similar
evidences of indebtedness for money borrowed (Section 1008).

When we say "liens", we mean pledges, mortgages, liens, encumbrances and
other security interests (Section 1008).

When we say "principal property", we mean any manufacturing plant or
warehouse, together with the land upon which it is erected and fixtures
constituting a part of the manufacturing plant or warehouse, owned by UTC or
any wholly-owned domestic manufacturing subsidiary and located in the United
States, the gross book value (without deduction of any reserve for
depreciation) of which on the date as of which the determination is being made
is an amount which exceeds 1% of consolidated net tangible assets, other than
any manufacturing plant or warehouse or any portion of the manufacturing plant
or warehouse or any fixture:

. which is financed by industrial development bonds; or

. which, in the opinion of the board of directors of UTC, is not of
material importance to the total business conducted by UTC and its
subsidiaries, taken as a whole (Section 101).

However, any of the actions described in the first two bullet points under
"--Liens" above may be taken if

. the indenture securities are equally and ratably secured; or

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<PAGE>

. the aggregate principal amount of the secured debt then outstanding
plus the attributable debt of UTC and its wholly-owned domestic
manufacturing subsidiaries in respect of sale and leaseback
transactions described below involving principal properties entered
into after the date when UTC first issues securities pursuant to the
indenture, other than transactions that are permitted as described in
the second bullet point under "--Sales and Leasebacks", would not
exceed 10% of consolidated net tangible assets.

When we say "attributable debt", we mean, as to any particular lease under
which any person is at the time liable for a term of more than 12 months, at
any date as of which the amount of attributable debt is to be determined, the
total net amount of rent required to be paid by the person under the lease
during the remaining term of the lease (excluding any subsequent renewal or
other extension options held by the lessee and excluding amounts on account of
maintenance and repairs, services, taxes and similar charges, and contingent
rents), discounted from the respective due dates of the payments under the
lease to the date of determination at the rate of fifteen percent (15%) per
annum, compounded monthly (Section 101).

When we say "consolidated net tangible assets", we mean the total amount
of assets (less applicable reserves and other properly deductible items) after
deducting:

. all current liabilities, excluding any current liabilities which are
by their terms extendible or renewable at the option of the obligor on
the liabilities to a time more than 12 months after the time as of
which the amount of current liabilities is being computed; and

. all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles, all as set forth on
the most recent balance sheet of UTC and its consolidated subsidiaries
and computed in accordance with generally accepted accounting
principles (Section 101).

This restriction on liens will not apply to debt secured by permitted
liens. Therefore, for purposes of this restriction, debt secured by permitted
liens will be excluded in computing secured debt. Permitted liens include:

. liens existing as of the date when UTC first issued securities
pursuant to the indenture;

. liens existing on any property of or shares of stock or debt of any
corporation at the time it became or becomes a wholly-owned domestic
manufacturing subsidiary, or arising after that time (a) pursuant to
contractual commitments entered into before the corporation became a
wholly-owned domestic manufacturing subsidiary and (b) otherwise than
in connection with the borrowing of money arranged after the
corporation became a wholly-owned domestic manufacturing subsidiary;

. liens on property (including shares of stock or debt of a wholly-owned
domestic manufacturing subsidiary) existing at the time of acquisition
and certain purchase money or similar liens;

. liens to secure specified exploration, drilling, development,
operation, construction, alteration, repair or improvement costs;

. liens securing debt owing by a subsidiary to UTC or to a wholly-owned
domestic manufacturing subsidiary;

. liens in connection with legal proceedings or arising in the ordinary
course of business and not in connection with the borrowing of money;

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<PAGE>

. liens in connection with government contracts, including the
assignment of moneys due or to become due on government contracts;

. materialmen's, carriers', mechanics', workmen's, repairmen's or other
like liens which are not overdue or which are being contested in good
faith in appropriate proceedings; and

. extensions, substitutions, replacements or renewals of the foregoing.

In addition, production payments and other financial arrangements with regard
to oil, gas and mineral properties are not deemed to involve liens securing
debt (Section 1008).

Sales and Leasebacks

So long as any debt securities are outstanding under the indenture, UTC
will not, and will not permit any wholly-owned domestic manufacturing
subsidiary to, enter into any sale and leaseback transaction after the date
when UTC first issued securities pursuant to the indenture, covering any
principal property, which was or is owned or leased by UTC or a wholly-owned
domestic manufacturing subsidiary and which has been or is to be sold or
transferred more than 120 days after the completion of construction and
commencement of full operation of that principal property.

However, a sale and leaseback transaction of this kind will not be
prohibited if

. attributable debt of UTC and its wholly-owned domestic manufacturing
subsidiaries in respect of the sale and leaseback transaction and all
other sale and leaseback transactions entered into after the date when
UTC first issued securities pursuant to the indenture (other than sale
and leaseback transactions that are permitted as described in the next
bullet point), plus the aggregate principal amount of debt secured by
liens on principal properties then outstanding (not otherwise
permitted or excepted) without equally and ratably securing the
indenture securities, would not exceed 10% of the consolidated net
tangible assets;

. an amount equal to the greater of the net proceeds of the sale or
transfer or the fair market value of the principal property sold or
transferred (as determined by UTC) is applied within 120 days to the
voluntary retirement of the indenture securities or other indebtedness
of UTC (other than indebtedness subordinated to the indenture
securities) or indebtedness of a wholly-owned domestic manufacturing
subsidiary, for money borrowed, maturing more than 12 months after the
voluntary retirement;

. the lease is for a temporary period not exceeding three years; or

. the lease is with UTC or another wholly-owned domestic manufacturing
subsidiary (Section 1009).

Restriction on Merger and Sales of Assets

UTC may not consolidate with or merge into any other corporation, or
convey, lease or transfer its properties and assets substantially as an
entirety to any person, unless all four of the following conditions are
satisfied:

. immediately after the transaction, no event of default (or event which
with notice or lapse of time, or both, would be an event of default)
with respect to the indenture securities will have happened and be
continuing;

. the corporation formed by the consolidation or into which UTC is
merged or the person which will have received the transfer or lease of
UTC's properties and assets will assume UTC's obligation for the due
and punctual payment of the principal, premium, if any, and

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<PAGE>

interest (including all additional amounts, if any, payable as
contemplated by Section 1010 of the indenture, on the indenture
securities and the performance and observance of every covenant to be
performed by UTC under the indenture, and will be organized under the
laws of the United States of America, one of the States thereof or the
District of Columbia;

. if any principal property of UTC or of any wholly-owned domestic
manufacturing subsidiary, or any shares of stock or debt of any
wholly-owned domestic manufacturing subsidiary, would become subject
to any lien, the indenture securities outstanding will be secured, as
to that principal property, equally and ratably with or prior to, the
debt which upon the transaction would become secured by the lien
unless UTC or the wholly-owned domestic manufacturing subsidiary could
create the lien under the indenture without equally and ratably
securing the indenture securities; and

. UTC has delivered to the trustee an officer's certificate and opinion
of counsel, each stating that the transaction complies with these
conditions (Sections 801 and 803).

For the purpose of providing the equal and ratable security referred to in the
preceding sentence, the outstanding principal amount of original issue discount
securities and indexed securities will mean that amount which would at the time
of providing the security be due and payable pursuant to Section 502 of the
indenture and the terms of the original issue discount securities and indexed
securities upon their acceleration, and the extent of the equal and ratable
security will be adjusted, to the extent permitted by law, as and when this
amount changes over time pursuant to the terms of such original issue discount
securities and indexed securities (Sections 502 and 803). See "--Events of
Default" for further information about acceleration of original issue discount
securities and indexed securities.

In the event of any transaction other than a lease described in and
complying with the four conditions listed in the immediately preceding
paragraph, UTC would be discharged from all obligations and covenants under the
indenture and the indenture securities, and could be dissolved and liquidated
(Section 802).

Defeasance and Covenant Defeasance

The indenture provides that, if the provisions of Article Fourteen are made
applicable without modification to the debt securities of or within any series
and any related coupons pursuant to Section 301 of the indenture, UTC may elect
either "defeasance" or "covenant defeasance" as described below:

. "defeasance" means that UTC may elect to defease and be discharged
from any and all obligations with respect to the debt securities and
any related coupons, except for the obligation to pay additional
amounts, if any, upon the occurrence of specified events of tax,
assessment or governmental charge with respect to payments on the debt
securities and the obligations to register the transfer or exchange of
the debt securities and any related coupons, to replace temporary or
mutilated, destroyed, lost or stolen debt securities and any related
coupons, to maintain an office or agency in respect of the debt
securities and any related coupons and to hold moneys for payment in
trust;

. "covenant defeasance" means that UTC may elect to be released from
its obligations with respect to the debt securities and any related
coupons that are described under "--Liens" and "--Sales and
Leasebacks," or, if provided pursuant to Section 301 of the indenture,
its obligations with respect to any other covenant, and any omission
to

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<PAGE>

comply with these obligations will not constitute a default or an
event of default with respect to the debt securities and any related
coupons.

To elect either defeasance or covenant defeasance, UTC must irrevocably deposit
with the trustee or another qualifying trustee, in trust, an amount, which
through the payment of principal and interest in accordance with the terms of
the government obligations (as defined in the next paragraph) will provide
money in an amount sufficient to pay the principal, premium, if any, and
interest on the debt securities and any related coupons, and any mandatory
sinking fund or analogous payments on them, on the scheduled due dates for
them. This amount must be deposited in the currency, currencies or currency
unit in which the debt securities and any related coupons are then specified as
payable at stated maturity, and/or government obligations applicable to the
debt securities and any related coupons. This applicability will be determined
on the basis of the currency or currency unit in which the debt securities are
then specified as payable at stated maturity. If so specified in the applicable
prospectus supplement, a trust of this kind may only be established if, among
other things, UTC has delivered to the trustee an opinion of counsel (as
specified in the indenture) to the effect that the holders of the debt
securities and any related coupons will not recognize income, gain or loss for
United States federal income tax purposes as a result of the defeasance or
covenant defeasance and will be subject to United States federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if the defeasance or covenant defeasance had not occurred. In the case
of defeasance, the opinion of counsel must refer to and be based upon a ruling
of the Internal Revenue Service or a change in applicable United States federal
income tax law occurring after April 1, 1990.

Unless otherwise specified in the applicable prospectus supplement,
"government obligations" means securities which are:

. direct obligations of the government which issued the currency in
which the debt securities are payable; or

. obligations of a person controlled or supervised by and acting as an
agency or instrumentality of the government which issued the currency
in which the debt securities of the applicable series are payable, the
payment of which is unconditionally guaranteed by that government,
which, in either case, are full faith and credit obligations of that
government payable in that currency and are not callable or redeemable
at the option of the issuer of the obligations and will also include
specified depository receipts issued by a bank or trust company as
custodian with respect to any government obligation of this kind
(Section 101 and Article Fourteen).

Unless otherwise provided in the prospectus supplement, if, after UTC has
deposited funds and/or government obligations to effect defeasance with respect
to any debt securities:

. the holder of a debt security is entitled to, and does, elect pursuant
to the terms of the debt security to receive payment in a currency or
currency unit other than that in which the deposit has been made in
respect of the debt security; or

. the currency or currency unit in which the deposit has been made in
respect of the debt security ceases to be used by its government of
issuance;

then the indebtedness represented by the debt security will be deemed to have
been, and will be, fully discharged and satisfied through the payment of the
principal, premium, if any, and interest, if any, on the debt security as they
become due out of the proceeds yielded by converting the amount so deposited in
respect of the debt security into the currency or currency unit in which the
debt security becomes payable as a result of the holder's election or the
government's cessation of usage based on the applicable market exchange rate
(as defined in the prospectus supplement

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<PAGE>

relating to the debt security) for that currency or currency unit in effect on
the second business day prior to each payment date. If the holder elected to
receive payment in a currency other than the currency deposited in trust as
described in the first bullet point of this paragraph, the currency deposited
in trust will be converted from time to time. However, if there is a cessation
of usage of the currency or currency unit by its government of issuance which
results in current exchange rates no longer being available, the conversion
will be based on the applicable market exchange rate for the currency or
currency unit (as nearly as possible) in effect at the time of cessation
(Section 1405). Unless otherwise provided in the prospectus supplement, all
payments of principal, premium, if any, and interest, if any, on any debt
security that is payable in a foreign currency or currency unit that ceases to
be used by its government of issuance will be made in U.S. dollars (Section
312).

If UTC effects covenant defeasance with respect to any debt securities and
any related coupons and the debt securities and any related coupons are
declared due and payable because of the occurrence of any event of default
other than the event of default described in the third bullet point under "--
Events of Default" with respect to Sections 1008 and 1009 of the indenture
(which sections would no longer be applicable to the debt securities or any
related coupons) or described in the third or fifth bullet point under "--
Events of Default" with respect to any other covenant with respect to which
there has been defeasance, the amount of cash and the amounts of principal and
interest payable on the government obligations on deposit with the trustee will
be sufficient to pay amounts due on the debt securities and any related coupons
at the time of their stated maturity but may not be sufficient to pay amounts
due on the debt securities and any related coupons at the time of the
acceleration resulting from the event of default. However, UTC would remain
liable to make payment of the amounts due at the time of acceleration.

The prospectus supplement may further describe the provisions, if any,
permitting defeasance or covenant defeasance, including any modifications to
the provisions described above, with respect to the debt securities of or
within a particular series and any related coupons.

Modification and Waiver

Modifications and amendments of the indenture may be made by UTC and the
trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of outstanding indenture securities which are
affected by the modification or amendment. However, the consent of the holder
of each indenture security affected by the modification or amendment is
required for any modification or amendment that would, among other things:

. change the stated maturity of principal of, or any installment of
interest or premium, if any, on, or change the obligation of UTC to
pay any additional amounts as contemplated by Section 1010 of the
indenture on, any security;

. reduce the principal amount of, or the rate of interest on, or any
premium payable on redemption of, any security, or reduce the amount
of principal of an original issue discount security that would be due
and payable upon declaration of acceleration of the maturity of the
original issue discount security or would be provable in bankruptcy;

. change the place of payment where, or the coin, currency, currencies,
currency unit or composite currency in which payment of principal,
premium, if any, or interest on any security is payable;

. impair the right to institute suit for the enforcement of any payment
on or with respect to any security;

. reduce the above stated percentage of holders of indenture securities
necessary to modify or amend the indenture or to consent to any waiver
under the indenture; or

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<PAGE>

. modify the foregoing requirements (Section 902).

The holders of at least a majority in aggregate principal amount of
outstanding indenture securities may, on behalf of all holders of outstanding
indenture securities, waive compliance by UTC with the restrictions described
in this prospectus under "--Liens" and "--Sales and Leasebacks" and some of the
restrictions described under "--Restriction on Merger and Sales of Assets" and
compliance with specified other covenants of UTC contained in the indenture
(Section 1011).

The indenture contains provisions for convening meetings of the holders of
indenture securities of a series if indenture securities of that series are
issuable as bearer securities (Section 1501). A meeting may be called at any
time by the trustee, and also, upon request, by UTC or the holders of at least
10% in principal amount of the indenture securities of that series outstanding.
If a meeting is called, notice must be given as provided in the indenture
(Section 1502). Except for any consent which must be given by the holder of
each indenture security affected by a modification or amendment of the
indenture, as described above, any resolution presented at a meeting or
adjourned meeting at which a quorum is present may be adopted by the
affirmative vote of the holders of a majority in principal amount of the
indenture securities of that series; provided, however, that any resolution
with respect to any consent or waiver which may be given by the holders of not
less than a specified percentage in principal amount of the indenture
securities of a series may be adopted at a meeting or adjourned meeting at
which a quorum is present only by the affirmative vote of that specified
percentage in principal amount of the indenture securities of that series; and
provided further that any resolution with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action which may be
made, given or taken by the holders of a specified percentage, which is less
than a majority in principal amount of indenture securities of a series may be
adopted at a meeting or adjourned meeting duly reconvened at which a quorum is
present by the affirmative vote of the holders of that specified percentage in
principal amount of the indenture securities of that series. Any resolution
passed or decision taken at any meeting of holders of indenture securities of
any series duly held in accordance with the indenture will be binding on all
holders of indenture securities of that series and the related coupons. The
quorum at any meeting called to adopt a resolution, and at any reconvened
meeting, will be persons holding or representing a majority in principal amount
of the indenture securities of a series. However, if any action is to be taken
at the meeting with respect to a consent or waiver which may be given by the
holders of not less than a specified percentage in principal amount of the
indenture securities of a series, the persons holding or representing that
specified percentage in principal amount of the indenture securities of the
series will constitute a quorum (Section 1504).

Events of Default

The indenture defines an "event of default" with respect to any series of
indenture securities as being any one of the following events:

. default in the payment of any interest upon any indenture security of
the series and any related coupon when due, continued for 30 days;

. default in the payment of the principal of, or premium, if any, on an
indenture security of the series at its maturity;

. default in the performance of any other covenant of UTC in the
indenture, continued for 60 days after written notice as provided in
the indenture, other than a covenant included in the indenture solely
for the benefit of series of indenture securities other than the
series in question or a covenant default the performance of which
would be covered by the fifth bullet point below;

. specified events in bankruptcy, insolvency or reorganization; and
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<PAGE>

. any other event of default provided with respect to indenture
securities of the series.

No event of default provided with respect to a particular series of indenture
securities, except as to events described in the third and fourth bullet points
above, necessarily constitutes an event of default with respect to any other
series of indenture securities (Section 501).

If an event of default described in the first, second or fifth bullet point
above with respect to indenture securities of any series at the time
outstanding occurs and is continuing, then the trustee or the holders of not
less than 25% in principal amount of the outstanding indenture securities of
that series may declare the principal amount of all of the indenture securities
of that series to be due and payable immediately, or, if the indenture
securities of that series are original issue discount securities or indexed
securities, the trustee or the same minimum number of holders may declare the
portion of the principal amount that is specified in the terms of that series
to be due and payable immediately. If an event of default described in the
third or fourth bullet point above occurs and is continuing, then the trustee
or the holders of not less than 25% in principal amount of all the indenture
securities then outstanding may declare the principal amount of all of the
outstanding indenture securities to be due and payable immediately, or, if any
indenture securities are original issue discount securities or indexed
securities, the trustee or the same minimum number of holders may declare the
portion of the principal amount that is specified in the terms of that series
to be due and payable immediately. However, at any time after a declaration of
acceleration with respect to outstanding indenture securities of a series (or
of all outstanding indenture securities, as the case may be) has been made, but
before a judgment or decree for payment of the money has been obtained by the
trustee as provided in the indenture, the holders of a majority in principal
amount of outstanding indenture securities of that series or of all outstanding
indenture securities, as the case may be, may, subject to specified conditions,
rescind and annul the acceleration if all events of default, other than the
nonpayment of accelerated principal or specified portion of accelerated
principal, with respect to outstanding indenture securities of the series or of
all outstanding indenture securities, as the case may be, have been cured or
waived as provided in the indenture (Section 502). The indenture also provides
that the holders of not less than a majority in principal amount of the
outstanding indenture securities of a series or of all outstanding indenture
securities, as the case may be, may, subject to specified limitations, waive
any past default and its consequences (Section 513). The prospectus supplement
relating to any series of debt securities which are original issue discount
securities or indexed securities will describe the particular provisions
relating to acceleration of a portion of the principal amount of the original
issue discount securities or indexed securities upon the occurrence and
continuation of an event of default.

In case an event of default with respect to the indenture securities of a
series has occurred and is continuing, the trustee will be obligated to
exercise those rights and powers vested in it by the indenture with respect to
the series that a prudent man would exercise and to use the same degree of care
and skill in their exercise as a prudent man would use under the circumstances
in the conduct of his own affairs (Section 601).

Subject to the provisions of the indenture relating to the duties of the
trustee in case an event of default occurs and is continuing, the trustee is
under no obligation to exercise any of the rights or powers under the indenture
at the request, order or direction of any of the holders unless the holders
have offered to the trustee reasonable security or indemnity (Section 603).
Subject to these provisions for the indemnification of the trustee and
specified limitations contained in the indenture, the holders of a majority in
principal amount of the outstanding indenture securities of a series or of all
outstanding indenture securities, as the case may be, will have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the trustee, or exercising any trust or power conferred on the
trustee (Section 512).

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UTC will be required to furnish to the trustee annually a statement as to
the fulfillment by UTC of all of its obligations under the indenture (Section
1004).

Governing Law

The indenture and the debt securities will be governed and construed in
accordance with the law of the State of New York.

Trustee

The trustee may resign or be removed with respect to one or more series of
indenture securities and a successor trustee may be appointed to act with
respect to the series (Section 610). If two or more persons are acting as
trustee with respect to different series of indenture securities, each trustee
will be a trustee of a trust under the indenture separate and apart from the
trust administered by any other trustee (Section 611), and any action described
in this prospectus to be taken by the "trustee" may then be taken by each
trustee with respect to, and only with respect to, the one or more series of
indenture securities for which it is trustee.

Listing

Unless otherwise provided in the applicable prospectus supplement or any
pricing supplement to the prospectus supplement, the debt securities will not
be listed on any securities exchange.

Foreign Currency Risks

Debt securities denominated or payable in foreign currencies may entail
significant risks. These risks include, without limitation, the possibility of
significant fluctuations in the foreign currency markets, the imposition or
modification of foreign exchange controls and possible illiquidity in the
secondary market. These risks will vary depending upon the currency or
currencies involved. These risks will be more fully described in the applicable
prospectus supplement.

DESCRIPTION OF DEBT WARRANTS

UTC may issue warrants for the purchase of debt securities. Debt warrants
may be issued separately or together with debt securities, currency warrants
(which are described under "Description of Currency Warrants") or stock-index
warrants (which are described under "Description of Stock-Index Warrants").

The debt warrants are to be issued under debt warrant agreements to be
entered into between UTC and one or more banks or trust companies, as debt
warrant agent, all as will be set forth in the prospectus supplement relating
to the debt warrants being offered by the prospectus supplement. A form of debt
warrant agreement, including a form of debt warrant certificate representing
the debt warrants, reflecting the alternative provisions that may be included
in the debt warrant agreements to be entered into with respect to particular
offerings of debt warrants, is incorporated by reference as an exhibit to the
registration statement. See "Where You Can Find More Information" for
information on how to obtain a copy of the form of debt warrant agreement.

The following description of the debt warrant agreements and the debt
warrant certificates and summaries of some provisions of the debt warrant
agreements and the debt warrant certificates do not describe every aspect of
the debt warrants and are subject to, and are qualified in their entirety by
reference to, all the provisions of the applicable debt warrant agreements and
the debt warrant certificates, including definitions of terms used in the debt
warrant agreements and not otherwise defined in this prospectus. For example,
in this section we use some terms that have been given special meaning in the
debt warrant agreements. We also include references in parentheses to some
sections of the debt warrant agreements. Whenever we refer to particular
sections or defined terms of the debt warrant agreements in this prospectus or
in the prospectus supplement, those sections or defined terms are incorporated
by reference here or in the prospectus supplement.

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Terms of the Debt Warrants to Be Described in the Prospectus Supplement

The particular terms of each issue of debt warrants, the debt warrant
agreement relating to the debt warrants and the debt warrant certificates
representing debt warrants will be described in the applicable prospectus
supplement. This description will include:

. the initial offering price;

. the currency or currency unit in which the price for the debt warrants
is payable;

. the title, aggregate principal amount and terms of the debt securities
purchasable upon exercise of the debt warrants;

. the title and terms of any related debt securities with which the debt
warrants are issued and the number of the debt warrants issued with
each debt security;

. the date, if any, on and after which the debt warrants and the related
debt securities will be separately transferable;

. the principal amount of debt securities purchasable upon exercise of
each debt warrant and the price at which that principal amount of debt
securities may be purchased upon exercise of each debt warrant;

. the date on which the right to exercise the debt warrants will
commence and the date on which this right will expire;

. if applicable, a discussion of United States federal income tax,
accounting or other considerations applicable to the debt warrants;

. whether the debt warrants represented by the debt warrant certificates
will be issued in registered or bearer form, and, if registered, where
they may be transferred and registered; and

. any other terms of the debt warrants.

Debt warrant certificates will be exchangeable for new debt warrant
certificates of different denominations and, if in registered form, may be
presented for registration of transfer and debt warrants may be exercised at
the corporate trust office of the debt warrant agent or any other office
indicated in the related prospectus supplement (Section 3.01). Before the
exercise of debt warrants, holders of debt warrants will not be entitled to
payments of principal, premium, if any, or interest, if any, on the debt
securities purchasable upon exercise of the debt warrants, or to enforce any of
the covenants in the indenture (Section 4.01).

Exercise of Debt Warrants

Unless otherwise provided in the related prospectus supplement, each debt
warrant will entitle the holder of debt warrants to purchase for cash the
principal amount of debt securities at the exercise price that will in each
case be set forth in, or be determinable as set forth in, the related
prospectus supplement (Sections 2.01 and 2.03). Debt warrants may be exercised
at any time up to the close of business on the expiration date specified in the
prospectus supplement relating to the debt warrants. After the close of
business on the expiration date or any later date to which the expiration date
may be extended by UTC, unexercised debt warrants will become void (Section
2.02).

Debt warrants may be exercised as set forth in the prospectus supplement
relating to the debt warrants. Upon receipt of payment and the debt warrant
certificate properly completed and duly executed at the corporate trust office
of the debt warrant agent or any other office indicated in the prospectus
supplement, UTC will, as soon as practicable, forward the debt securities
purchasable upon exercise of the debt warrants to the person entitled to them.
If fewer than all of the debt warrants represented by the debt warrant
certificate are exercised, a new debt warrant certificate will be issued for
the remaining amount of debt warrants (Section 2.03).

If you hold your interest in a debt warrant indirectly, you should check
with the institution

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<PAGE>

through which you hold your interest in the debt warrant to determine how these
provisions will apply to you. See "Legal Ownership" for a general description
of the procedures and rights applicable to indirect owners of debt warrants.

Modifications

The debt warrant agreement may be amended by UTC and the debt warrant
agent, without the consent of the holder of any debt warrant certificate, for
the purpose of curing any ambiguity, or of curing, correcting or supplementing
any defective provision contained in the debt warrant agreement, or making any
provisions in regard to matters or questions arising under the debt warrant
agreement that UTC may deem necessary or desirable; provided that the amendment
may not adversely affect the interest of the holders of debt warrant
certificates in any material respect (Section 6.03). UTC and the debt warrant
agent also may modify or amend the debt warrant agreement and the terms of the
debt warrants, with the consent of the owners of not less than a majority in
number of the then outstanding unexercised debt warrants affected. However, any
modification or amendment that increases the exercise price, shortens the
period of time during which the debt warrants may be exercised or otherwise
materially and adversely affects the exercise rights of the owners of the debt
warrants or reduces the number of debt warrants the consent of whose owners is
required for modification or amendment of the debt warrant agreement or the
terms of the debt warrants may be made only with the consent of the owners
affected by the modification or amendment.

Merger, Consolidation, Sale or Other Dispositions

Under the debt warrant agreement, UTC may, to the extent permitted in the
indenture, consolidate with, or sell or convey all or substantially all of its
assets to, or merge with or into, any other corporation. If at any time there
is a merger, consolidation, sale, transfer, conveyance or other disposition of
substantially all of the assets of UTC, the successor or assuming corporation
will succeed to and be substituted for UTC, with the same effect as if it had
been named in the debt warrant agreement and in the debt warrants as UTC. UTC
will then be relieved of any further obligation under the debt warrant
agreement or under the debt warrants (Sections 6.01 and 6.02).

Enforceability of Rights; Governing Law

The debt warrant agent will act solely as an agent of UTC in connection
with the issuance and exercise of debt warrants and will not assume any
obligation or relationship of agency or trust for or with any holder of a debt
warrant certificate or any owner of a beneficial interest in debt warrants
(Section 5.02). The holders of debt warrant certificates, without the consent
of the debt warrant agent, the trustee, the holder of any debt securities
issued upon exercise of debt warrants or the holder of any other debt warrant
certificates, may, on their own behalf and for their own benefit, enforce, and
may institute and maintain any suit, action or proceeding against UTC suitable
to enforce, or otherwise in respect of, their rights to exercise debt warrants
evidenced by their debt warrant certificates (Section 4.02). Except as may
otherwise be provided in the related prospectus supplement, each issue of debt
warrants and the applicable debt warrant agreement will be governed by and
construed in accordance with the law of the State of New York (Section 6.07).

DESCRIPTION OF CURRENCY WARRANTS

UTC may issue warrants to receive from UTC the cash value in U.S. dollars
of the right to purchase or to sell the foreign currencies or units of two or
more foreign currencies that will be designated by UTC at the time of offering.
Currency warrants may be issued:

. in the form of currency put warrants, entitling their owners to
receive from UTC the currency warrant cash settlement value (as
defined under "Terms of the Currency Warrants to Be Described in the
Prospectus

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<PAGE>

Supplement" below) in U.S. dollars of the right to sell a specified
foreign base currency or currency unit or units for a specified amount
of U.S. dollars;

. in the form of currency call warrants, entitling their owners to
receive from UTC the currency warrant cash settlement value in U.S.
dollars of the right to purchase a specified amount of a base currency
for a specified amount of U.S. dollars; or

. in any other form that is specified in the related prospectus
supplement.

Currency warrants may be issued separately or together with debt securities,
debt warrants or stock-index warrants.

A currency warrant will be settled only in U.S. dollars and accordingly
will not require or entitle an owner to sell, deliver, purchase or take
delivery of any other currency or currency unit.

The currency warrants are to be issued under currency warrant agreements to
be entered into between UTC and one or more banks or trust companies, as
currency warrant agents, all as will be described in the prospectus supplement
relating to the currency warrants being offered by the prospectus supplement. A
form of currency warrant agreement, including a form of currency warrant
certificate representing the currency warrants, is incorporated by reference as
an exhibit to the registration statement. See "Where You Can Find More
Information" for information on how to obtain a copy of the form of currency
warrant agreement.

The following description of the currency warrant agreements and the
currency warrant certificates and summaries of some provisions of the currency
warrant agreements and the currency warrant certificates do not describe every
aspect of the currency warrants and are subject to, and are qualified in their
entirety by reference to, all the provisions of the applicable currency warrant
agreements and the currency warrant certificates, including definitions of
terms used in the currency warrant agreements and not otherwise defined in this
prospectus. For example, in this section we use some terms that have been given
special meaning in the currency warrant agreements. We also include references
in parentheses to some sections of the currency warrant agreements. Whenever we
refer to particular sections or defined terms of the currency warrant
agreements in this prospectus or in the prospectus supplement, those sections
or defined terms are incorporated by reference here or in the prospectus
supplement.

Terms of the Currency Warrants to Be Described in the Prospectus Supplement

The particular terms of each issue of currency warrants, the currency
warrant agreement relating to the currency warrants and the currency warrant
certificates representing the currency warrants will be described in the
applicable prospectus supplement. This description will include:

. the aggregate amount of the currency warrants;

. the initial offering price;

. whether the currency warrants shall be currency put warrants, currency
call warrants, or otherwise;

. the formula for determining the currency warrant cash settlement
value, if applicable, of each currency warrant;

. the procedures and conditions relating to the exercise of the currency
warrants;

. the circumstances which will cause the currency warrants to be deemed
to be automatically exercised;

. any minimum number of currency warrants which must be exercised at any
one time, other than upon automatic exercise;

. the date on which the right to exercise the currency warrants will
commence and the date on which the right will expire;

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<PAGE>

. the identity of the currency warrant agent;

. if applicable, a discussion of United States federal income tax,
accounting or other considerations applicable to the currency
warrants; and

. any other terms of the currency warrants.

If the currency warrants are to be offered either in the form of currency
put warrants or currency call warrants, an owner will receive a cash payment
upon exercise only if the currency warrants have a cash settlement value in
excess of zero at that time. The spot exchange rate of the applicable base
currency, as compared to the U.S. dollar upon exercise, will determine,
together with the strike price, whether the currency warrants have a cash
settlement value on any given day prior to their expiration. The strike price
for a currency warrant will be the amount of the base currency that the holder
has the right to sell, in the case of a currency put warrant, or purchase, in
the case of a currency call warrant, in exchange for one U.S. dollar. The
currency warrants are expected to be "out-of-the-money" (i.e., the cash
settlement value will be zero) when initially sold and will be "in-the-money"
(i.e., their cash settlement value will exceed zero) if, in the case of
currency put warrants, the base currency depreciates against the U.S. dollar to
the extent that one U.S. dollar is worth more than the strike price or, in the
case of currency call warrants, the base currency appreciates against the U.S.
dollar to the extent that one U.S. dollar is worth less than the strike price.
The "exercise date" of the currency warrants will be defined in the applicable
prospectus supplement. "Cash settlement value" on an exercise date of currency
put warrants is an amount which is the greater of:

. zero; and

. an amount calculated as follows:

constant - (constant X strike price)
spot rate

The cash settlement value on an exercise date of currency call warrants is an
amount which is the greater of:

. zero; and

. an amount calculated as follows:

(constant X strike price) - constant
spot rate

The constant will be a specified fixed amount, for example, 50. The spot rate
means the spot exchange rate of the base currency for U.S. dollars on the
exercise date.

Book-Entry Procedures and Settlement

Except as may otherwise be provided in the related prospectus supplement,
each issue of currency warrants will be issued in book-entry form and
represented by a single global currency warrant certificate, registered in the
name of a depositary or its nominees. The cash settlement value on exercise of
a currency warrant will be paid by the currency warrant agent to the depositary
or to a depositary participant. See "Legal Ownership" for a further description
of book-entry issuance and other important matters relating to the currency
warrants.

Exercise of Currency Warrants

Unless otherwise provided in the related prospectus supplement, each
currency warrant will entitle the beneficial owner to the cash settlement value
of the currency warrant on the applicable exercise date, in each case as these
terms will further be defined in the related prospectus supplement (Section
2.02). If not exercised prior to 3:00 p.m., New York City time, on the fifth
business day preceding the expiration date, currency warrants will be deemed
automatically exercised on the expiration date (Section 2.03). Currency
warrants may also be deemed to be automatically exercised if they are delisted.
Procedures for exercise of the currency warrants will be set out in the related
prospectus supplement. In addition, if you hold your interest in a currency
warrant indirectly, either because it has been issued in global form or because
you otherwise hold it in street name, you should check with the institution
through which you hold your interest in the currency warrant to determine how
these

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<PAGE>

provisions will apply to you. See "Legal Ownership" for a general description
of the procedures and rights that may be applicable to indirect owners of
currency warrants.

Listing

Unless otherwise provided in the related prospectus supplement, each issue
of currency warrants will be listed on a national securities exchange as
specified in the prospectus supplement, subject only to official notice of
issuance, as a pre-condition to the sale of any of the currency warrants. If
the currency warrants are delisted from, or permanently suspended from trading
on, that exchange, and, at or before the delisting or suspension, the currency
warrants have not been listed on another national securities exchange, currency
warrants not previously exercised will be deemed automatically exercised on the
date the delisting or permanent trading suspension becomes effective (Section
2.03). The cash settlement value to be paid if the currency warrants are thus
deemed automatically exercised will be as described in the related prospectus
supplement. UTC will notify holders of currency warrants as soon as practicable
of the delisting or permanent trading suspension. The applicable currency
warrant agreement will contain a covenant of UTC not to seek delisting of the
currency warrants from, or permanent suspension of their trading on, the
exchange on which they are listed (Section 2.04).

Modifications

The currency warrant agreement and the terms of the currency warrants may
be amended by UTC and the currency warrant agent, without the consent of the
beneficial owners or the registered holder, for the purpose of curing any
ambiguity, or of curing, correcting or supplementing any defective or
inconsistent provision contained in the currency warrant agreement and the
terms of the currency warrants, or in any other manner which UTC may deem
necessary or desirable and which will not adversely affect the interests of the
beneficial owners (Section 6.01).

UTC and the currency warrant agent also may modify or amend the currency
warrant agreement and the terms of the currency warrants with the consent of
the owners of not less than a majority in number of the then outstanding
unexercised currency warrants affected, provided that no modification or
amendment that increases the strike price in the case of a currency put
warrant, decreases the strike price in the case of a currency call warrant,
shortens the period of time during which the currency warrants may be exercised
or otherwise materially and adversely affects the exercise rights of the owners
of the currency warrants or reduces the number of outstanding currency warrants
the consent of whose owners is required for modification or amendment of the
currency warrant agreement or the terms of the currency warrants may be made
without the consent of the owners affected by the modification or amendment
(Section 6.01).

Merger, Consolidation, Sale or Other Dispositions

If at any time there is a merger, consolidation, sale, transfer, conveyance
or other disposition of substantially all of the assets of UTC, then the
successor or assuming corporation will succeed to and be substituted for UTC,
with the same effect as if it had been named in the currency warrant agreement
and in the currency warrants as UTC. UTC will then be relieved of any further
obligation under the currency warrant agreement or under the currency warrants,
and UTC as the predecessor corporation may then or at any later time be
dissolved, wound up or liquidated (Section 3.02).

Enforceability of Rights by Owners; Governing Law

The currency warrant agent will act solely as an agent of UTC in connection
with the issuance and exercise of currency warrants and will not assume any
obligation or relationship of agency or trust for or with any owner of a
beneficial interest in currency warrants or with

26
<PAGE>

the registered holder of the currency warrants (Section 5.02). The currency
warrant agent will have no duty or responsibility in case of any default by
UTC in the performance of its obligations under the currency warrant agreement
or currency warrant certificate including, without limitation, any duty or
responsibility to initiate any proceedings at law or otherwise or to make any
demand upon UTC (Section 5.02). Owners may, without the consent of the
currency warrant agent, enforce by appropriate legal action, on their own
behalf, their right to exercise, and to receive payment for, their currency
warrants (Section 3.01). Except as may otherwise be provided in the applicable
prospectus supplement, each issue of currency warrants and the applicable
currency warrant agreement will be governed by and construed in accordance
with the law of the State of New York (Section 6.05).

Risk Factors Relating to the Currency Warrants

The currency warrants may entail significant risks. These risks include,
without limitation, the possibility of significant fluctuations in the foreign
currency markets, the imposition or modification of foreign exchange controls,
possible illiquidity in the secondary market and the risk that the currency
warrants will expire worthless. These risks will vary depending on the
particular terms of the currency warrants and will be more fully described in
the related prospectus supplement.

DESCRIPTION OF STOCK-INDEX WARRANTS

UTC may issue warrants entitling the owners of the warrants to receive,
upon exercise, an amount in cash determined by reference to decreases or
increases in the level of a specified stock index which may be based on one or
more U.S. or foreign stocks or a combination of U.S. or foreign stocks. Stock-
index warrants may be issued:

. in the form of stock-index put warrants, entitling their owners to
receive from UTC the stock-index cash settlement value in cash in U.S.
dollars, which amount will be determined by reference to the amount,
if any, by which the exercise price exceeds the index value at the
time of exercise; and

. in the form of stock-index call warrants, entitling their owners to
receive from UTC the stock-index cash settlement value in cash in U.S.
dollars, which amount will be determined by reference to the amount,
if any, by which the index value at the time of exercise exceeds the
exercise price.

The "stock-index cash settlement value", the "exercise price" and the "index
value" will be defined in the applicable prospectus supplement. Stock-index
warrants may be issued separately or together with debt securities, debt
warrants or currency warrants.

The prospectus supplement for an issue of stock-index warrants will set
forth the formula by which the stock-index cash settlement value will be
determined, including any multipliers, if applicable. In addition, if so
specified in the related prospectus supplement, following the occurrence of a
market disruption event (as defined in the prospectus supplement), the stock-
index cash settlement value may be determined on a different basis than upon
normal exercise of a stock-index warrant. Unless otherwise indicated in the
related prospectus supplement, a stock-index warrant will be settled only in
cash in U.S. dollars, which is the only permissible method of settlement under
exchange rules currently approved by the SEC. Accordingly, a stock-index
warrant will not require or entitle an owner to sell, deliver, purchase or
take delivery of any shares of any underlying stock or any other securities.
The owners will not be entitled to any of the rights of the holders of any
underlying stock.

The stock-index warrants are to be issued under stock-index warrant
agreements to be entered into between UTC and one or more banks or trust
companies, as stock-index warrant agents, all as will be described in the

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<PAGE>

prospectus supplement relating to the stock-index warrants being offered by
the prospectus supplement. A form of stock-index warrant agreement, including
a form of stock-index warrant certificate, is incorporated by reference as an
exhibit to the registration statement. See "Where You Can Find More
Information" for information on how to obtain a copy of the form of stock-
index warrant agreement.

The following description of the stock-index warrant agreements and the
stock-index warrant certificates and summaries of some provisions of the
stock-index warrants and the stock-index warrant certificates do not describe
every aspect of the stock-index warrants and are subject to, and are qualified
in their entirety by reference to, all of the provisions of the applicable
stock-index warrant agreements and the stock-index warrant certificates,
including definitions of terms used in the stock-index warrant agreements and
not otherwise defined in this prospectus. For example, in this section we use
some terms that have been given special meaning in the stock-index warrant
agreements. We also include references in parentheses to some sections of the
stock-index warrant agreements. Whenever we refer to particular sections or
defined terms of the stock-index warrant agreements in this prospectus or in
the prospectus supplement, those sections or defined terms are incorporated by
reference here or in the prospectus supplement.

Terms of the Stock-Index Warrants to Be Described in the Prospectus Supplement

The particular terms of each issue of stock-index warrants, the stock-
index warrant agreement relating to the stock-index warrants and the stock-
index warrant certificate representing the stock-index warrants will be
described in the applicable prospectus supplement. This description will
include:

. the aggregate amount of the stock-index warrants;

. the initial offering price of the stock-index warrants;

. the stock index for the stock-index warrants, which may be based on
one or more U.S. or foreign stocks or a combination of U.S. or foreign
stocks and may be a preexisting U.S. or foreign stock index compiled
and published by a third party or an index based on one or more
underlying stock or stocks selected by UTC solely in connection with
the issuance of the stock-index warrants, and specified information
regarding the stock index and the underlying stock or stocks;

. whether the stock-index warrants are puts, calls or otherwise;

. the date on which the right to exercise the stock-index warrants
commences and the date on which this right expires;

. the manner in which the stock-index warrants may be exercised;

. the minimum number, if any, of the stock-index warrants exercisable at
any one time;

. the maximum number, if any, of the stock-index warrants that may,
subject to UTC's election, be exercised by all owners (or by any
person or entity) on any day;

. any provisions for the automatic exercise of the stock-index warrants
other than at expiration;

. the method of providing for a substitute index or otherwise
determining the amount payable in connection with the exercise of the
stock-index warrants if the stock index changes or ceases to be made
available by its publisher, which determination will be made by an
independent expert;

. if applicable, a discussion of United States federal income tax,
accounting or other considerations applicable to the stock-index
warrants;

. any provisions permitting an owner to condition an exercise notice on

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<PAGE>

the absence of specified changes in the index value after the exercise
date; and

. any other terms of the stock-index warrants.

Book-Entry Procedures and Settlement

Except as may otherwise be provided in the related prospectus supplement,
each issue of stock-index warrants will be issued in book-entry form and
represented by a single global stock-index warrant certificate, registered in
the name of a depositary or its nominees. The stock-index cash settlement value
will be paid by the stock-index warrant agent to the depositary or to a
depositary participant. See "Legal Ownership" for a further description of
book-entry issuance and other important matters relating to the stock-index
warrants.

Exercise of Stock-Index Warrants

Unless otherwise provided in the related prospectus supplement, each stock-
index warrant will entitle the owner to the stock-index cash settlement value
of the stock-index warrant on the applicable valuation date, in each case as
these terms will further be defined in the related prospectus supplement
(Section 2.02). If not exercised prior to 3:00 p.m., New York City time, on the
stock-index warrant expiration date, stock-index warrants will be deemed
automatically exercised on the stock-index warrant expiration date (Section
2.03). Procedures for exercise of the stock-index warrants will be described in
the related prospectus supplement. In addition, if you hold your interest in a
stock-index warrant indirectly, either because it has been issued in global
form or because you otherwise hold it in street name, you should check with the
institution through which you hold your interest in the stock-index warrant to
determine how these provisions will apply to you. See "Legal Ownership" for a
general description of the procedures and rights applicable to indirect holders
of stock-index warrants.

Listing

Unless otherwise provided in the related prospectus supplement, each issue
of stock-index warrants will be listed on a national securities exchange, as
specified in the related prospectus supplement, subject only to official notice
of issuance, as a pre-condition to the sale of any of the stock-index warrants.
It may be necessary in certain circumstances for that national securities
exchange to obtain the approval of the SEC in connection with any listing of
the stock-index warrants. If the stock-index warrants are delisted from, or
permanently suspended from trading on, the exchange, and, at or before the
delisting or suspension, the stock-index warrants have not been listed on
another national securities exchange, stock-index warrants not previously
exercised will be deemed automatically exercised on the date the delisting or
permanent trading suspension becomes effective (Section 2.03). The stock-index
cash settlement value to be paid if the stock-index warrants are then deemed
automatically exercised will be described in the related prospectus supplement.
UTC will notify holders of stock-index warrants as soon as practicable of the
delisting or permanent trading suspension. The applicable stock-index warrant
agreement will contain a covenant of UTC not to seek delisting of the stock-
index warrants from, or permanent suspension of their trading on the exchange
on which they are listed (Section 2.05).

Modifications

The stock-index warrant agreement and the terms of the stock-index warrants
may be amended by UTC and the stock-index warrant agent, without the consent of
the beneficial owners or the registered holder, for the purpose of curing any
ambiguity, or of curing, correcting or supplementing any defective or
inconsistent provision contained in the stock-index warrant agreement and the
terms of the stock-index warrants, or in any other manner which UTC may deem
necessary or desirable and which will not adversely affect the interests of the
owners (Section 6.01).

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<PAGE>

UTC and the stock-index warrant agent also may modify or amend the stock-
index warrant agreement and the terms of the stock-index warrants, with the
consent of the owners of not less than a majority in number of the then
outstanding unexercised stock-index warrants affected, provided that no such
modification or amendment that increases the exercise price in the case of a
stock-index call warrant, decreases the exercise price in the case of a stock-
index put warrant, shortens the period of time during which the stock-index
warrants may be exercised or otherwise materially and adversely affects the
exercise rights of the owners of the stock-index warrants or reduces the number
of outstanding stock-index warrants the consent of whose owners is required for
modification or amendment of the stock-index warrant agreement or the terms of
the stock-index warrants may be made without the consent of the owners affected
by the modification or amendment (Section 6.01).

Merger, Consolidation, Sale or Other Dispositions

If at any time there is a merger, consolidation, sale, transfer, conveyance
or other disposition of substantially all of the assets of UTC, then the
successor or assuming corporation will succeed to and be substituted for UTC,
with the same effect as if it had been named in the stock-index warrant
agreement and in the stock-index warrants as UTC. UTC will then be relieved of
any further obligation under the stock-index warrant agreement or under the
stock-index warrants, and UTC as the predecessor corporation may then or at any
later time be dissolved, wound up or liquidated (Section 3.02).

Enforceability of Rights by Owners; Governing Law

The stock-index warrant agent will act solely as an agent of UTC in
connection with the issuance and exercise of stock-index warrants and will not
assume any obligation or relationship of agency or trust for or with any owner
of a beneficial interest in stock-index warrants or with the registered holder
of the stock-index warrants (Section 5.02). The stock-index warrant agent will
have no duty or responsibility in case of any default by UTC in the performance
of its obligations under the stock-index warrant agreement or stock-index
warrant certificate including, without limitation, any duty or responsibility
to initiate any proceedings at law or otherwise or to make any demand upon UTC
(Section 5.02). Owners may, without the consent of the stock-index warrant
agent, enforce by appropriate legal action, on their own behalf, their right to
exercise, and to receive payment for, their stock-index warrants (Section
3.01). Except as may otherwise be provided in the applicable prospectus
supplement, each issue of stock-index warrants and the applicable stock-index
warrant agreement will be governed by and construed in accordance with the law
of the State of New York (Section 6.05).

Risk Factors Relating to the Stock-Index Warrants

The stock-index warrants may entail significant risks. These risks include,
without limitation, the possibility of significant fluctuations in the
applicable stock index, possible illiquidity in the secondary market and the
risk that the stock-index warrants will expire worthless. These risks will vary
depending on the particular terms of the stock-index warrants and will be more
fully described in the related prospectus supplement.

PLAN OF DISTRIBUTION

UTC may sell the securities described in this prospectus through agents,
underwriters or dealers, or directly to a limited number of institutional
purchasers or to a single purchaser.

The accompanying prospectus supplement will identify or describe:

. any underwriters, dealers or agents;

. their compensation;

. the net proceeds to UTC;

. the purchase price of the securities;
30
<PAGE>

. the initial public offering price of the securities; and

. any exchange on which the securities are listed.

Agents

UTC may designate agents to solicit purchases for the period of their
appointment to sell securities on a continuing basis. Unless otherwise
indicated in the related prospectus supplement, any agent will be acting on a
reasonable best efforts basis for the period of its appointment.

Underwriters

If UTC uses underwriters for a sale of securities, the securities will be
acquired by the underwriters for their own account. The underwriters may resell
the securities in one or more transactions, including negotiated transactions
at a fixed public offering price or at varying prices determined at the time of
sale. Unless otherwise set forth in the related prospectus supplement, the
obligations of the underwriters to purchase the securities will be subject to
customary conditions and the underwriters will be obligated to purchase all the
securities of the series offered if any of the securities of that series are
purchased. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.

Direct Sales

UTC may also sell securities directly to one or more purchasers without
using underwriters or agents.

Underwriters, dealers, and agents that participate in the distribution of
the securities may be underwriters as defined in the Securities Act of 1933, as
amended, and any discounts or commissions they receive from UTC and any profit
on their resale of the securities may be treated as underwriting discounts and
commissions under the Securities Act. UTC may have agreements with the
underwriters, dealers and agents to indemnify them against specified civil
liabilities, including liabilities under the Securities Act, or to contribute
to payments they may be required to make in respect of these liabilities.
Underwriters, dealers and agents may engage in transactions with or perform
services for UTC or its subsidiaries in the ordinary course of their
businesses.

VALIDITY OF THE SECURITIES

The validity of the securities described in this prospectus will be passed
upon for UTC by Cleary, Gottlieb, Steen & Hamilton, New York, New York and for
any underwriters or agents, as the case may be, by Sullivan & Cromwell, New
York, New York.

EXPERTS

The consolidated financial statements of UTC incorporated in this
prospectus by reference to our Annual Report on Form 10-K for the year ended
December 31, 1998, as amended to reflect UT Automotive as a discontinued
operation by our Current Report on Form 8-K filed on June 11, 1999, have been
so incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

Ernst & Young LLP, independent auditors, have audited the consolidated
financial statements of Sundstrand Corporation included in Sundstrand
Corporation's Annual Report on Form 10-K for the year ended December 31, 1998,
as set forth in Ernst & Young LLP's report, which is incorporated in this
prospectus by reference to our Current Report on Form 8-K filed with the SEC on
June 18, 1999. Sundstrand Corporation's financial statements are so
incorporated by reference in reliance on Ernst & Young LLP's report, given on
their authority as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to

31
<PAGE>

the public over the Internet at the SEC's web site at http://www.sec.gov. You
may also read and copy any document we file at the SEC's public reference
rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please
call the SEC at 1-800-SEC-0330 for further information on the public reference
rooms.

The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings
made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 until we sell all of the securities.

. Annual Report on Form 10-K for the year ended December 31, 1998, as
amended to reflect UT Automotive as a discontinued operation by our
Current Report on Form 8-K filed on June 11, 1999.

. Quarterly Report on Form 10-Q for the quarter ended March 31, 1999.

. Current Reports on Form 8-K filed with the SEC on February 23, March
19, April 14, May 4, and June 18, 1999.

You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:

William H. Trachsel
Senior Vice President, General Counsel and Secretary
United Technologies Corporation
Hartford, Connecticut 06101
(860) 728-7000

You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not
authorized anyone else to provide you with different information. We are not
making an offer of these debt securities and warrants in any state where the
offer is not permitted. You should not assume that the information in this
prospectus or any prospectus supplement is accurate as of any date other than
the date on the front of those documents.

32
<PAGE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

No dealer, salesperson or other person is authorized to give any information
or to represent anything not contained in this prospectus. You must not rely on
any unauthorized information or representations. This prospectus is an offer to
sell or a solicitation of an offer to buy only the securities it describes, but
only under circumstances and in jurisdictions where it is lawful to do so. The
information contained in this prospectus is current only as of its date.

-----------

TABLE OF CONTENTS

Prospectus Supplement

<TABLE>
<CAPTION>
Page
----
<S> <C>
Forward-Looking Statements................................................. S-2
Description of Notes....................................................... S-2
Important Currency Exchange Information.................................... S-25
Foreign Currency Risks..................................................... S-25
United States Tax Considerations........................................... S-27
Supplemental Plan of Distribution.......................................... S-34
Validity of Notes.......................................................... S-35

Prospectus

About this Prospectus...................................................... 2
United Technologies........................................................ 2
Ratio of Earnings to Fixed Charges......................................... 3
Use of Proceeds............................................................ 4
Legal Ownership............................................................ 4
Description of Debt Securities............................................. 6
Description of Debt Warrants............................................... 21
Description of Currency Warrants........................................... 23
Description of Stock-Index Warrants........................................ 27
Plan of Distribution....................................................... 30
Validity of the Securities................................................. 31
Experts.................................................................... 31
Where You Can Find More Information........................................ 31
</TABLE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

$1,000,000,000

[LOGO] United Technologies

Medium-Term Notes, Series C

---------------

PROSPECTUS SUPPLEMENT

---------------

Goldman, Sachs & Co.

Merrill Lynch & Co.

Salomon Smith Barney

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution.

<TABLE>
<S> <C>
Filing Fee for Registration Statement........................... $111,200
Legal Fees and Expenses......................................... 151,000*
Accounting Fees and Expenses.................................... 42,000*
Trustee's Fees and Expenses (including counsel fees)............ 7,500*
Blue Sky Fees and Expenses...................................... 1,100*
Printing and Engraving Fees..................................... 19,000*
Rating Agency Fees.............................................. 62,000*
Miscellaneous................................................... 15,000*
--------
Total......................................................... $408,800*
========
</TABLE>
- --------
* Estimated.

Item 15. Indemnification of Directors and Officers.

Section 6.5 of UTC's Bylaws requires UTC to indemnify, to the full extent
permitted from time to time under the General Corporation Law of the State of
Delaware, each person who is made or threatened to be made a party to any
threatened, pending or completed action, suit or proceeding by reason of the
fact that such person is or was a director or officer of UTC.

Section 145 of the Delaware General Corporation Law permits a Delaware
corporation to indemnify any person who is or was a party to any actual or
threatened legal action, whether criminal, civil, administrative or
investigative, by reason of the fact that the person is or was an officer,
director or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer or agent of another corporation,
partnership or other enterprise, against expenses (including attorney's fees),
judgments, fines and settlement payments reasonably and actually incurred by
him or her in connection with such proceeding, if he or she acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe was unlawful, except that, with
respect to any legal action by or in the right of the corporation itself, an
officer, director or agent of the corporation is entitled to indemnification
only for expenses (including attorney's fees) reasonably and actually incurred,
and is not entitled to indemnification in respect of any claim, issue or matter
as to which he or she is found liable to the corporation, unless the court
determines otherwise.

As authorized by a resolution of the Board of Directors, UTC has purchased
and maintains at its expense on behalf of directors, officers and managerial
employees insurance, within certain limits, covering liabilities which may be
incurred by them in such capacities.

Reference is made to the form of Underwriting Agreement incorporated by
reference as Exhibit 1 hereto for a description of indemnification arrangements
for offerings of debt securities or warrants pursuant thereto.

Article Ten of the Restated Certificate of Incorporation of UTC provides
that a director of UTC shall not be personally liable to UTC or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to
UTC or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law for payment of unlawful
dividends or unlawful stock repurchases or redemption, or (iv) for any
transaction from which the director derived an improper personal benefit.

II-1
<PAGE>

Item 16. Exhibits.

<TABLE>
<C> <S>
1 --Form of Underwriting Agreement (incorporated by reference to
Exhibit 1 to UTC's Pre-Effective Amendment No. 1 to Registration
Statement on Form S-3, File No. 333-74195, filed with the Commission
on April 14, 1999).

4(a) --Indenture, dated as of April 1, 1990, between UTC and The
Connecticut National Bank, Trustee (incorporated by reference to
Exhibit 4(a) to UTC's Registration Statement on Form S-3, File No.
333-74195, filed with the Commission on March 10, 1999).

4(b) --Form of Notes (incorporated by reference to Exhibit 4(b) to UTC's
Registration Statement on Form S-3, File No. 33-40163, filed with
the Commission on April 25, 1991).

4(c) --Form of Debt Warrant Agreement between UTC and the Debt Warrant
Agent, including a form of Debt Warrant Certificate (incorporated by
reference to Exhibit 4(c) to UTC's Registration Statement on Form S-
3, File No. 33-40163, filed with the Commission on April 25, 1991).

4(d) --Form of Currency Warrant Agreement between UTC and the Currency
Warrant Agent, including a form of Currency Warrant Certificate
(incorporated by reference to Exhibit 4(d) to UTC's Registration
Statement on Form S-3, File No. 33-40163, filed with the Commission
on April 25, 1991).

4(e) --Form of Stock-Index Warrant Agreement between UTC and the Stock-
Index Warrant Agent, including a form of Stock-Index Warrant
Certificate (incorporated by reference to Exhibit 4(e) to UTC's
Registration Statement on Form S-3, File No. 33-40163, filed with
the Commission on April 25, 1991).

5 --Opinion of Cleary, Gottlieb, Steen & Hamilton as to the validity of
the Securities.

12(a) --Computation of Ratio of Earnings to Fixed Charges (incorporated by
reference to Exhibit 12 to UTC's Annual Report on Form 10-K, File
No. 1-812, for the fiscal year ended December 31, 1998, as amended
by UTC's Current Report on Form 8-K, File No. 1-812, filed with the
Commission on June 11, 1999).

12(b) --Computation of Ratio of Earnings to Fixed Charges (incorporated by
reference to Exhibit 12 to UTC's Quarterly Report on Form 10-Q, File
No. 1-812, for the quarter ended March 31, 1999).

12(c) --Computation of Ratio of Earnings to Fixed Charges.

23(a) --Consent of PricewaterhouseCoopers LLP.

23(b) --Consent of Ernst & Young LLP.

23(c) --Consent of Cleary, Gottlieb, Steen & Hamilton (contained in their
opinion filed as Exhibit 5 to this Registration Statement).

24 --Powers of Attorney.

25 --Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of State Street Bank and Trust Company, as successor to The
Connecticut National Bank.
</TABLE>

Item 17. Undertakings.

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which,

II-2
<PAGE>

individually or in the aggregate, represent a fundamental change in the
information set forth in the registration statement; and

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;

provided, however, that paragraphs (i) and (ii) above do not apply if the
registration statement is on Form S-3 or Form S-8 and the information required
to be included in a post-effective amendment by those paragraphs is contained
in periodic reports filed by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

II-3
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this registration
statement and post-effective amendment to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Hartford, State of
Connecticut, on the 15th day of July, 1999.

United Technologies Corporation

/s/ David J. FitzPatrick
By: _________________________________
David J. FitzPatrick
Senior Vice President and Chief
Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this
registration statement and post-effective amendment has been signed below by
the following persons in the capacities indicated, on the 15th day of July,
1999.

<TABLE>
<CAPTION>
Signatures Title
---------- -----

<S> <C>
* Chairman, Director, President and Chief
______________________________________ Executive Officer
(George David)

/s/ David J. FitzPatrick Senior Vice President and Chief Financial
______________________________________ Officer
(David J. FitzPatrick)

/s/ Jay L. Haberland Vice President--Controller
______________________________________
</TABLE> (Jay L. Haberland)

<TABLE>
<S> <C>
*
______________________________________
(Antonia Handler Chayes)

*
______________________________________
(Jean-Pierre Garnier)

______________________________________
(Pehr G. Gyllenhammar)

* Director
______________________________________
(Karl J. Krapek)

*
______________________________________
(Charles R. Lee)

*
______________________________________
(Richard D. McCormick)
</TABLE>

II-4
<PAGE>

<TABLE>
<CAPTION>
Signatures Title
---------- -----

<S> <C>
______________________________________
(William J. Perry)

*
______________________________________
(Frank P. Popoff)

*
______________________________________
(Andre Villeneuve)

* Director
______________________________________
(Harold A. Wagner)

/s/ William H. Trachsel
*By _____________________________
(Attorney-in-Fact)

</TABLE>

II-5

<PAGE>

EXHIBIT 5

[LETTERHEAD OF CLEARY, GOTTLIEB, STEEN & HAMILTON]

July 15, 1999

United Technologies Corporation
One Financial Plaza
Hartford, Connecticut 06101

Ladies and Gentlemen:

We have acted as special counsel to United Technologies Corporation, a
Delaware corporation (the "Company"), in connection with the preparation and
filing with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Securities Act"), of the Company's
Registration Statement on Form S-3 (the "Registration Statement") relating to
the offering from time to time, together or separately and in one or more series
of (i) unsubordinated, non-convertible debt securities (the "Debt Securities"),
(ii) warrants to purchase Debt Securities (the "Debt Warrants"), (iii) warrants,
the value of which is related to the value of various currencies (the "Currency
Warrants") and (iv) warrants, the value of which is related to various stock or
other indices (the "Stock-Index Warrants"). The Debt Warrants, Currency Warrants
and Stock-Index Warrants are referred to herein collectively as the "Warrant
Securities", and the Debt Securities and Warrant Securities are referred to
herein collectively as the "Offered Securities." The Offered Securities being
registered under the Registration Statement, together with securities registered
under two previously filed registration statements (Registration Nos. 33-46916
and 333-74195), will have an aggregate initial offering price of up to
$1,000,000,000 or the equivalent thereof in foreign currencies or composite
currencies and will be offered on a continuous or delayed basis pursuant to the
provisions of Rule 415 under the Securities Act.

The Debt Securities are to be issued under an indenture dated as of
April 1, 1990 (the "Indenture") between the Company and State Street Bank and
Trust Company (as successor to The Connecticut National Bank), as trustee (the
"Trustee"). The Debt Warrants are to be issued from time to time under one or
more debt warrant agreements (each a "Debt Warrant Agreement"), the Currency
Warrants are to be issued from time to time under one or more currency warrant
agreements (each a "Currency Warrant Agreement") and the Stock-Index Warrants
are to be issued from time to time under one or more stock-index warrant
agreements
<PAGE>

(each a "Stock-Index Warrant Agreement" and, together with the Debt Warrant
Agreements and the Currency Warrant Agreements, the "Warrant Agreements"), each
to be entered into by the Company and one or more institutions, as warrant
agents (each a "Warrant Agent"), each as identified in the applicable Warrant
Agreement.

We have reviewed the originals or copies certified or otherwise
identified to our satisfaction of all such corporate records of the Company and
such other instruments and other certificates of public officials, officers and
representatives of the Company and such other persons, and we have made such
investigations of law, as we have deemed appropriate as a basis for the opinions
expressed below. In rendering the opinions expressed below, we have assumed the
authenticity of all documents submitted to us as originals and the conformity to
the originals of all documents submitted to us as copies. In addition, we have
assumed and have not verified the accuracy as to factual matters of each
document we have reviewed.

With regard to the Indenture, we draw your attention to the fact that
the Trust Indenture Reform Act of 1990 (the "Trust Indenture Reform Act") became
law on November 15, 1990. The Trust Indenture Reform Act provides, among other
things, that outstanding indentures such as the Indenture shall be deemed to be
amended and certain provisions thereof superseded. Our opinions are given on
the basis that the Indenture has been so amended and certain of its provisions
so superseded, as contemplated by the Trust Indenture Reform Act, and the term
"Indenture", as hereinafter used, shall mean the indenture so amended and
superseded.

Based upon the foregoing, and subject to the further assumptions and
qualifications set forth below, it is our opinion that:

1. The Company is validly existing as a corporation in good standing under the
laws of the State of Delaware.

2. The execution and delivery of the Indenture have been duly authorized by all
necessary corporate action of the Company, and the Indenture has been duly
executed and delivered by the Company, and qualified under the Trust Indenture
Act of 1939, as amended, and is a valid, binding and enforceable agreement of
the Company.

3. The execution and delivery of the Debt Securities to be issued under the
Indenture have been duly authorized by all necessary corporate action of the
Company and the Debt Securities will be duly issued and will constitute valid,
binding and enforceable obligations of the Company, entitled to the benefits of
the Indenture.

4. The execution and delivery of the Warrant Securities have been duly
authorized by all necessary corporate action of the Company and the Warrant
Securities will be duly issued and will constitute valid, binding and
enforceable obligations of the Company.

5. The execution and delivery of the Warrant Agreements have been duly
authorized by all necessary corporate action of the Company and the Warrant
Agreements will constitute valid, binding and enforceable obligations of the
Company.

2
<PAGE>

Insofar as the foregoing opinions relate to the valid existence and
good standing of the Company, they are based solely on a certificate of good
standing received from the Secretary of State of the State of Delaware and on a
telecopy confirmation from such Secretary of State. Insofar as the foregoing
opinions relate to the validity, binding effect or enforceability of any
agreement or obligation of the Company (a) we have assumed that each other party
to such agreement or obligation has satisfied or, prior to issuance of the
Offered Securities, will satisfy those legal requirements that are applicable to
it to the extent necessary to make such agreement or obligation enforceable
against it and (b) such opinions are subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally and to general
principles of equity.

In rendering the opinion expressed in paragraph 3 above, we have
assumed that each series of Debt Securities will be issued with an original
aggregate principal amount (or in the case of Debt Securities issued at original
issue discount, an aggregate issue price) of $2,500,000 or more.

In rendering the opinions expressed in numbered paragraphs 3, 4 and 5
above, we have further assumed that (i) all Offered Securities will be issued
and sold in compliance with applicable law, (ii) the Offered Securities will be
sold and delivered to, and paid for by, the purchasers at the price and in
accordance with the terms of an agreement or agreements duly authorized and
validly executed and delivered by the parties thereto, (iii) the Company will
authorize the offering and issuance of the Offered Securities and will
authorize, approve and establish the final terms and conditions thereof and of
any applicable Warrant Agreement and will take any other appropriate additional
corporate action, and (iv) certificates representing the Offered Securities will
be duly executed and delivered and, to the extent required by the applicable
Indenture or Warrant Agreement, duly authenticated and countersigned.

We note that by statute New York provides that a judgment or decree
rendered in a currency other than the currency of the United States shall be
converted into U.S. dollars at a rate of exchange prevailing on the date of
entry of the judgment or decree. There is no corresponding federal statute and
no controlling federal court decision on this issue. Accordingly, we express no
opinion as to whether a federal court would award a judgment in a currency other
than U.S. dollars or, if it did so, whether such court would order the
conversion of such judgment into U.S. dollars.

The foregoing opinions are limited to the federal law of the United
States of America, the law of the State of New York and the General Corporation
Law of the State of Delaware.

We hereby consent to the use of our name in the prospectus
constituting a part of the Registration Statement and in any prospectus
supplements related thereto under the heading "Validity of the Securities" as
counsel for the Company who have passed on the validity of the Debt Securities,
Debt Warrants, Currency Warrants and Stock-Index Warrants being registered by
the Registration Statement and as having prepared this opinion, and to the use
of this opinion as a part (Exhibit 5) of the Registration Statement. In giving
such consent, we do not thereby

3
<PAGE>

admit that we are within the category of persons whose consent is required under
Section 7 of the Securities Act or the Rules and Regulations of the Commission
thereunder.

Very truly yours,

CLEARY, GOTTLIEB, STEEN & HAMILTON

By /s/ David Lopez
----------------------
David Lopez, a Partner

<PAGE>

EXHIBIT 12(c)

UNITED TECHNOLOGIES CORPORATION AND SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges
(Millions of Dollars)

Years Ended December 31,

1995 1994

Fixed Charges:
Interest expense $ 231 $ 256
Interest capitalized 15 18
One-third of rents* 81 93
--------- ---------
Total Fixed Charges $ 327 $ 367
========= =========

Earnings:
Income from continuing
operations before income
taxes and minority interests $ 1,172 $ 900
--------- ---------

Fixed charges per above 327 367
Less: interest capitalized (15) (18)
--------- ---------
312 349
--------- ---------

Amortization of interest capitalized 38 40
--------- ---------

Total Earnings $ 1,522 $ 1,289
========= =========

Ratio of Earnings to Fixed Charges 4.65 3.51
========= =========

*Reasonable approximation of the interest factor.

<PAGE>

[LOGO OF PRICEWATERHOUSECOOPERS APPEARS HERE]

Exhibit 23(a)

Consent of Independent Accountants

We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
January 21, 1999, except for Note 16, as to which the date is May 20, 1999,
relating to the restated consolidated financial statements of United
Technologies Corporation for the three years in the period ended December 31,
1998 included in its Current Report on Form 8-K dated June 11, 1999, filed with
the Securities and Exchange Commission. We also consent to the incorporation by
reference of our report on the Financial Statement Schedule, which is included
as an exhibit to such Form 8-K. We also consent to the reference to us under the
heading "Experts" in such Prospectus.

/s/PricewaterhouseCoopers LLP
----------------------------
PricewaterhouseCoopers LLP
Hartford, Connecticut
July 14, 1999

<PAGE>

EXHIBIT 23(b)

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated January 25, 1999 with respect to the financial
statements of Sundstrand Corporation included in its Annual Report (Form 10-K)
for the year ended December 31, 1998, incorporated by reference in the
Registration Statement (Form S-3) and related prospectus of United Technologies
Corporation for the registration of $1,000,000,000 of debt securities, debt
warrants, currency warrants and stock-index warrants.

/s/ ERNST & YOUNG LLP

Chicago, Illinois
July 15, 1999

<PAGE>

EXHIBIT 24
UNITED TECHNOLOGIES CORPORATION

Power Of Attorney

KNOW ALL PERSONS BY THESE PRESENTS that the undersigned director or
officer, or both, of UNITED TECHNOLOGIES CORPORATION, a Delaware corporation
(the "Corporation"), hereby constitutes and appoints William H. Trachsel, David
J. FitzPatrick, Gilles Renaud and Jay L. Haberland and each of them, his or her
true and lawful attorneys-in-fact and agents, with full power of substitution
and resubstitution, for him or her and in his or her name, place and stead, in
any and all capacities, to sign a registration statement on Form S-3, or such
other form as may be recommended by counsel, to be filed with the Securities and
Exchange Commission (the "Commission"), and any and all amendments and
post-effective amendments thereto and supplements to the prospectus contained
therein, and any and all instruments and documents filed as a part of or in
connection with the said registration statement or amendments thereto, or
supplements or amendments to such prospectus, covering the offering and issuance
for aggregate gross proceeds to the Corporation of up to U.S. $400,000,000 (or
its equivalent in one of more foreign currencies or currency units as determined
at the date of issuance) of unsubordinated non-convertible debentures, notes
and/or other debt obligations of the Corporation, warrants to purchase such debt
obligations, warrants relating to the purchase or sale of one or more foreign
currencies or currency units and/or warrants relating to increases or decreases
in any specified stock index or indices; granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully and to all intents and purposes as he or she might or could
do in person, hereby ratifying and confirming all that the said attorneys-in-
fact and agents, or any one of them, shall do or cause to be done by virtue
hereof.