<PAGE>
RULE NO. 424(b)(2)
REGISTRATION NO. 333-74195
PROSPECTUS SUPPLEMENT
(To Prospectus Dated April 16, 1999)
$400,000,000
[LOGO] United Technologies
6 1/2% Notes due 2009
----------------
The notes will bear interest at the rate of 6 1/2% per year. Interest on the
notes is payable in arrears on June 1 and December 1 of each year, beginning on
December 1, 1999. The notes will mature on June 1, 2009. Interest on the notes
will accrue from the date of delivery. We may redeem all or any portion of the
notes at any time at the applicable redemption price described under
"Description of the Notes--Optional Redemption."
----------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus supplement or the related prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
----------------
<TABLE>
<CAPTION>
Per Note
Total
-------- ------------
<S> <C> <C>
Public Offering Price.................................... 99.338% $397,352,000
Underwriting Discount.................................... 0.650% $ 2,600,000
Proceeds to United Technologies (before expenses)........ 98.688% $394,752,000
</TABLE>
----------------
The underwriters are offering the notes subject to various conditions. The
underwriters expect to deliver the notes to purchasers in book-entry form only,
through the facilities of The Depository Trust Company on or about May 24,
1999.
Salomon Smith Barney Goldman, Sachs & Co.
Merrill Lynch & Co.
J.P. Morgan & Co.
May 19, 1999
<PAGE>
You should rely only on the information contained in or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We
have not authorized anyone to provide you with different information. We are
not making an offer of these securities in any state where the offer is not
permitted. You should not assume that the information provided by this
prospectus supplement or the accompanying prospectus is accurate as of any date
other than the date on the front of this prospectus supplement.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Supplement
United Technologies Corporation............................................ S-3
Recent Developments........................................................ S-3
Use of Proceeds............................................................ S-4
Ratio of Earnings to Fixed Charges......................................... S-4
Selected Consolidated Financial Data....................................... S-5
Description of the Notes................................................... S-7
Underwriting............................................................... S-10
Validity of the Notes...................................................... S-11
Experts.................................................................... S-11
Prospectus
About this Prospectus...................................................... 2
United Technologies........................................................ 2
Recent Developments........................................................ 3
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........................................... 24
Description of Stock-Index Warrants........................................ 27
Plan of Distribution....................................................... 31
Validity of the Securities................................................. 31
Experts.................................................................... 32
Where You Can Find More Information........................................ 32
</TABLE>
S-2
<PAGE>
UNITED TECHNOLOGIES CORPORATION
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.
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.
RECENT DEVELOPMENTS
On February 22, 1999, UTC announced an agreement to acquire Sundstrand
Corporation in a merger valued at approximately $4.3 billion, including assumed
debt. The consideration to be paid consists of cash and stock. This merger is
expected to close in mid-June 1999. Sundstrand is a leader in the design and
manufacture of proprietary, technology based components and subsystems for
aerospace and industrial markets, with 1998 sales and net income of $2.0
billion and $226 million, respectively. Sundstrand will be combined with UTC's
Hamilton Standard division, forming one of the world's leading suppliers of
high value added airframe components and subsystems.
On May 4, 1999, UTC completed the sale of its UT Automotive unit to Lear
Corporation for $2.3 billion in cash. UTC plans to use a portion of the
proceeds from the sale to fund the cash portion of the consideration for UTC's
pending acquisition of Sundstrand. The remainder of the proceeds will be used
for general corporate purposes, including other acquisitions or share
repurchases.
S-3
<PAGE>
For more information on the sale of UT Automotive and the proposed
acquisition of Sundstrand, see "Recent Developments" in the accompanying
prospectus and our current report on Form 8-K dated April 14, 1999, which is
incorporated by reference in this prospectus supplement. The current report
includes important pro forma financial information that you should review.
USE OF PROCEEDS
The net proceeds from the offering of the notes 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 financing our pending acquisition
of Sundstrand, other possible acquisitions and repurchases of our stock.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Three Months
Ended
March 31,
------------
1999 1998
---- ----
<S> <C>
6.54 6.30
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 of rents, the proportion deemed
representative of the interest factor.
See "Ratio of Earnings to Fixed Charges" in the accompanying prospectus for
the ratio of earnings to fixed charges for the years ended December 31, 1994
through December 31, 1998 and the pro forma ratio of earnings to fixed charges
for the year ended December 31, 1998, reflecting the sale of UT Automotive, the
acquisition of Sundstrand, interest related to the issuance of long-term and
medium-term debt and the use of a portion of the proceeds from the sale to fund
part of the acquisition price for Sundstrand, as if these transactions had
occurred on January 1, 1998.
S-4
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following tables contain selected consolidated historical financial
information and selected unaudited pro forma financial information for the
periods presented. The historical financial information is included in our
quarterly report on Form 10-Q for the quarter ended March 31, 1999 and in our
annual report on Form 10-K for the year ended December 31, 1998, both of which
are incorporated by reference in this prospectus supplement.
The pro forma balance sheet information reflects the sale of UT Automotive,
which was completed on May 4, 1999, and the merger with Sundstrand, which is
expected to close in mid-June 1999, as if those transactions had occurred on
December 31, 1998. The pro forma statement of operations data reflect UT
Automotive as a discontinued operation and the acquisition of Sundstrand, as if
both transactions had occurred on January 1, 1998. Complete pro forma financial
statements and footnotes can be found in our registration statement on Form S-
4, filed on May 7, 1999.
Statement of Operations Data
</TABLE>
<TABLE>
<CAPTION>
Pro Forma Years Ended December
Year Ended 31,
December 31, -----------------------
1998 1998 1997 1996
In Millions of Dollars ------------ ------- ------- -------
(Unaudited)
<S> <C> <C> <C> <C>
Revenues................................. $24,799 $25,715 $24,222 $23,051
Research and development................. 1,260 1,315 1,187 1,122
Income before interest expense, income
taxes and minority interests............ 2,304 (1) 2,167 1,927 1,718
Interest expense......................... 297 204 191 217
Income taxes............................. 657 623 565 494
Net income............................... $ 1,363 $ 1,255 $ 1,072 $ 906
</TABLE>
<TABLE>
<CAPTION>
Quarters
Ended
March 31,
-------------
1999 1998
In Millions of Dollars ------ ------
(Unaudited)
<S> <C> <C>
Revenues......................................................... $5,442 $5,308
Research and development......................................... 274 277
Income from continuing operations before interest expense, income
taxes and minority interests.................................... 490 409
Interest expense................................................. 55 47
Income taxes..................................................... 136 114
Income from:
Continuing operations........................................... 278 229
Discontinued operations......................................... 30 31
Net income....................................................... $ 308 $ 260
</TABLE>
- --------
(1) Represents income from continuing operations before interest expense,
income taxes and minority interests.
S-5
<PAGE>
Balance Sheet Data
<TABLE>
<CAPTION>
Pro Forma
as of As of As of December 31,
December 31, March 31, -------------------------
In Millions of Dollars 1998 1999 1998 1997 1996
(except ratio data) ------------ ----------- ------- ------- -------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
Cash.................... $1,676 (1) $ 657 $ 550 $ 655 $ 998
Working capital......... 2,709 (1) 2,677 (2) 1,620 1,905 2,287
Total assets............ 22,793 (1) 17,912 18,375 16,440 16,412
Long-term debt
(including
current portion)....... 2,999 1,653 1,675 1,398 1,534
Total debt.............. 3,666 2,194 2,187 1,587 1,750
Debt to total
capitalization......... 35% 33% 33% 28% 29%
Net debt (total debt
less cash)............. 1,990 (1) 1,537 1,637 932 752
Net debt to total
capitalization......... 22% (1) 25% 27% 19% 15%
ESOP Preferred Stock,
net.................... 456 454 456 450 434
Shareowners' Equity..... 6,951 (3) 4,499 4,378 4,073 4,306
- --------
</TABLE>
(1) Reflects on a pro forma basis net cash proceeds from the sale of UTC's UT
Automotive unit and net cash consideration to be paid to Sundstrand
shareowners.
(2) Includes net investment in discontinued UT Automotive operation.
(3) Reflects the estimated after-tax gain from the sale of UTC's UT Automotive
unit and the pro forma adjustment for the acquisition of Sundstrand.
Operating Segment Data
<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------------------------
Revenues Operating Profit
------------------------- ----------------------
1998 1997 1996 1998 1997 1996
In Millions of Dollars ------- ------- ------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Otis......................... $ 5,572 $ 5,548 $ 5,595 $ 533 $ 465 $ 524
Carrier...................... 6,922 6,056 5,958 495 458 422
Pratt & Whitney.............. 7,876 7,402 6,201 1,024 816 637
Flight Systems............... 2,891 2,804 2,596 287 301 244
UT Automotive................ 2,962 2,987 3,233 169 173 196
------- ------- ------- ------ ------ ------
Total segment................ $26,223 $24,797 $23,583 $2,508 $2,213 $2,023
Eliminations and other....... (508) (575) (532) (98) (64) (117)
General corporate expenses... -- -- -- (243) (222) (188)
------- ------- ------- ------ ------ ------
Consolidated................. $25,715 $24,222 $23,051 $2,167 $1,927 $1,718
======= ======= ======= ====== ====== ======
</TABLE>
S-6
<PAGE>
DESCRIPTION OF THE NOTES
The following description of the particular terms of the notes offered by
this prospectus supplement supplements the description of the general terms and
provisions of debt securities under the heading "Description of Debt
Securities" in the accompanying prospectus. Capitalized terms used in this
prospectus supplement that are otherwise not defined will have the meanings
given to them in the accompanying prospectus.
We will issue the notes in the aggregate principal amount of $400,000,000.
The notes will mature on June 1, 2009. We will issue the notes only in book-
entry form, in denominations of $1,000 and integral multiples of $1,000. The
notes will bear interest at the annual rate shown on the cover of this
prospectus supplement and will accrue interest from May 24, 1999 or from the
most recent date to which interest has been paid or provided for. Interest will
be payable twice a year, on June 1 and December 1, beginning December 1, 1999,
to the person in whose name a note is registered at the close of business on
the May 15 or November 15 that precedes the date on which interest will be
paid. We will have the option to redeem the notes at any time, as described
below.
In some circumstances, we may elect to discharge our obligations on the notes
through defeasance or covenant defeasance. See "Description of Debt
Securities--Defeasance and Covenant Defeasance" in the accompanying prospectus
for more information about how we may do this.
Optional Redemption
We may, at our option, redeem all or any part of the notes. If we choose to
do so, we will mail a notice of redemption to you not less than 30 days and not
more than 60 days before this redemption occurs. The redemption price will be
equal to the greater of:
(1) 100% of the principal amount of the notes to be redeemed; and
(2) the sum of the present values of the Remaining Scheduled Payments on
the notes, discounted to the redemption date on a semiannual basis,
assuming a 360-day year consisting of twelve 30-day months, at the Treasury
Rate plus 15 basis points.
In either case, the redemption price will also include interest accrued to
the date of redemption on the principal balance of the notes being redeemed.
"Treasury Rate" means, for any redemption date, the annual rate equal to the
semiannual equivalent yield to maturity of the Comparable Treasury Issue,
assuming a price for the Comparable Treasury Issue equal to the Comparable
Treasury Price, expressed as a percentage of its principal amount, for that
redemption date. The yield of the Comparable Treasury Issue will be computed as
of the second business day immediately preceding the redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by one of the investment banking firms named below that would be used,
at the time of selection and in accordance with customary financial practice,
in pricing new issues of corporate debt securities of comparable maturity to
the remaining term of the notes.
The investment banks we may use to select a Comparable Treasury Issue for
this purpose are Salomon Smith Barney Inc., Goldman, Sachs & Co., Merrill
Lynch, Pierce,
S-7
<PAGE>
Fenner & Smith Incorporated and J.P. Morgan Securities Inc., each of their
successors, and any two other nationally recognized investment banking firms
that we will appoint from time to time that are primary dealers of U.S.
government securities in New York City, each of whom we call a "Reference
Treasury Dealer." If any of the firms named in the preceding sentence ceases to
be a primary dealer of U.S. government securities in New York City, we will
appoint another nationally recognized investment banking firm as a substitute.
"Comparable Treasury Price" means, for any redemption date:
(1) the average of the Reference Treasury Dealer Quotations obtained by
the trustee as required by the indenture for that redemption date after
excluding the highest and lowest of those Reference Treasury Dealer
Quotations; or
(2) if the trustee obtains fewer than four Reference Treasury Dealer
Quotations, the average of all those quotations.
"Reference Treasury Dealer Quotation" means, with respect to any redemption
date, the average, as determined by the trustee, of the bid and asked prices
for the Comparable Treasury Issue, expressed in each case as a percentage of
its principal amount, quoted in writing to the trustee by a Reference Treasury
Dealer as of 3:30 p.m., New York time, on the third business day preceding that
redemption date. The trustee shall seek Reference Treasury Dealer Quotations in
respect of any redemption date from each of the then-existing Reference
Treasury Dealers.
"Remaining Scheduled Payments" means, with respect to each note being
redeemed, the remaining scheduled payments of principal and interest on that
note that would be due after the related redemption date but for the
redemption. If, however, the redemption date is not an interest payment date
with respect to that note, the amount of the next succeeding scheduled interest
payment on that note that would have been due will be deemed reduced by the
amount of interest accrued on the note to the redemption date.
On and after any redemption date, the notes or any portion of the notes
called for redemption will stop accruing interest. On or before any redemption
date, we will deposit with the paying agent or the trustee money sufficient to
pay the accrued interest on the notes to be redeemed and their redemption
price. If less than all of the notes are redeemed, the trustee will choose the
notes to be redeemed by any method that it deems fair and appropriate.
Book-Entry System
We will issue the notes in the form of one or more fully registered global
securities, as described in "Legal Ownership--Global Securities" in the
accompanying prospectus. We will deposit these global securities with, or on
behalf of, The Depository Trust Company, New York, New York, known as DTC, and
register these securities in the name of DTC's nominee.
DTC has advised us and the underwriters that it is a limited-purpose trust
company organized under the laws of the State of New York, a "banking
organization" within the meaning of the New York Banking Law, 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 holds securities of institutions that have accounts with it or its
participants. Through its maintenance of an electronic book-entry system, DTC
facilitates the clearance and settlement of securities transactions among its
S-8
<PAGE>
participants and eliminates the need to deliver securities certificates
physically. DTC's participants include securities brokers and dealers,
including the underwriters of this offering, banks, trust companies, clearing
corporations and other organizations, some of whom, and/or their
representatives, own DTC. DTC is owned by a number of its participants and by
the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. Access to DTC's book-entry
system is also available to others such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly. DTC agrees with and represents to
its participants that it will administer its book-entry system in accordance
with its rules and bylaws and requirements of law. The rules applicable to DTC
and its participants are on file with the SEC.
S-9
<PAGE>
UNDERWRITING
Subject to the terms and conditions stated in the underwriting agreement and
in the pricing agreement, each underwriter named below has severally agreed to
purchase, and we have agreed to sell to each underwriter, the principal amount
of notes stated opposite the name of each underwriter.
<TABLE>
<CAPTION>
Principal
Amount
Underwriter of Notes
----------- ------------
<S> <C>
Salomon Smith Barney Inc. ........................................ $160,000,000
Goldman, Sachs & Co. ............................................. 100,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................................. 70,000,000
J.P. Morgan Securities Inc. ...................................... 70,000,000
------------
Total........................................................... $400,000,000
============
</TABLE>
The underwriting agreement and the pricing agreement provide that the
obligations of the several underwriters to purchase the notes included in this
offering are subject to approval of certain legal matters by counsel and to
certain other conditions. The underwriters are obligated to purchase all the
notes if they purchase any of the notes.
The underwriters propose to offer some of the notes directly to the public
at the public offering price stated on the cover page of this prospectus
supplement and some of the notes to certain dealers at the public offering
price less a concession not in excess of 0.40% of the aggregate principal
amount of the notes. The underwriters may allow, and these dealers may
reallow, a concession not in excess of 0.25% of the aggregate principal amount
of the notes on sales to certain other dealers. After the initial offering of
the notes to the public, the public offering price and these concessions may
be changed by the underwriters.
The following table shows the underwriting discounts and commissions we will
pay to the underwriters in connection with this offering, expressed as a
percentage of the aggregate principal amount of the notes.
<TABLE>
<CAPTION>
Paid by UTC
-----------
<S> <C>
Per note............................................................ 0.650%
</TABLE>
In connection with the offering, Salomon Smith Barney Inc., on behalf of the
underwriters, may purchase and sell notes in the open market. These
transactions may include over-allotment, syndicate covering transactions and
stabilizing transactions. Over-allotment involves syndicate sales of notes in
excess of the principal amount of notes to be purchased by the underwriters in
the offering, which creates a syndicate short position. Syndicate covering
transactions involve purchases of the notes in the open market after the
distribution has been completed in order to cover syndicate short positions.
Stabilizing transactions consist of certain bids or purchases of notes made
for the purpose of preventing or retarding a decline in the market price of
the notes while the offering is in progress.
The underwriters may also impose a penalty bid. Penalty bids permit the
underwriters to reclaim a selling concession
S-10
<PAGE>
from a syndicate member when Salomon Smith Barney Inc., in covering syndicate
short positions or making stabilizing purchases, repurchases notes originally
sold by that syndicate member.
Any of these activities may cause the price of the notes to be higher than
the price that otherwise would exist in the open market in the absence of such
transactions. These transactions may be effected in the over-the-counter market
or otherwise and, if commenced, may be discontinued at any time.
We estimate that the total expenses of this offering will be $216,140.
The underwriters and their affiliates have performed certain investment
banking and advisory and general financing and banking services for us from
time to time for which they have received customary fees and expenses. The
underwriters may, from time to time, be customers of, engage in transactions
with and perform services for us in the ordinary course of their business.
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, or to contribute to
payments the underwriters may be required to make in respect of any of those
liabilities.
VALIDITY OF THE NOTES
The validity of the notes will be passed upon for us by Cleary, Gottlieb,
Steen & Hamilton, New York, New York and for the underwriters by Sullivan &
Cromwell, New York, New York.
EXPERTS
The financial statements incorporated in the prospectus supplement by
reference to UTC's annual report on Form 10-K for the year ended December 31,
1998 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
this firm as experts in auditing and accounting.
With respect to the unaudited consolidated financial information of UTC for
the three-month periods ended March 31, 1999 and 1998, incorporated by
reference in this prospectus supplement, PricewaterhouseCoopers LLP reported
that they have applied limited procedures in accordance with professional
standards for a review of such information. However, their separate report
dated April 20, 1999, incorporated by reference in this prospectus supplement,
states that they did not audit and they do not express an opinion on that
unaudited consolidated financial information. PricewaterhouseCoopers LLP has
not carried out any significant or additional audit tests beyond those which
would have been necessary if their report had not been included. Accordingly,
the degree of reliance on their report on such information should be restricted
in light of the limited nature of the review procedures applied.
PricewaterhouseCoopers LLP is not subject to the liability provisions of
Section 11 of the Securities Act of 1933 for their report on the unaudited
consolidated financial information because that report is not a "report" or a
"part" of the registration statement prepared or certified by
PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the
Securities Act.
S-11
<PAGE>
$1,000,000,000
[LOGO] UNITED TECHNOLOGIES
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 April 16, 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 the aerospace, building systems and automotive
industries throughout the world. United Technologies Corporation and its
consolidated subsidiaries conduct their business within five 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 and
transport refrigeration equipment; and aftermarket service and
components.
. UT Automotive manufactures automotive electrical distribution systems;
DC electric motors and actuators; motor driven cooling fan modules;
electro-mechanical and electronic controls, switches and components;
insulation and acoustical materials and systems; and automotive
exterior trim.
. Pratt & Whitney provides large and small commercial and military
turbofan (jet) and turboprop engines, spare parts and product support;
specialized engine maintenance, 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
2
<PAGE>
controls, propellers, environmental controls systems and space life
support systems.
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.
RECENT DEVELOPMENTS
On February 22, 1999, UTC announced an agreement to acquire Sundstrand
Corporation in a merger valued at approximately $4.3 billion, including assumed
debt. Approximately $1.9 billion of this purchase price is expected to be paid
in cash and the remainder, exclusive of assumed debt, in stock. However, under
the terms of the merger agreement, all of the purchase price could be paid in
cash. Any financing required to pay the additional cash would have to be
approved by UTC's Board of Directors.
The merger will be subject to customary conditions including approvals by
Sundstrand shareowners and approval under the European antitrust laws and by
U.S. and foreign regulatory agencies. The merger will be accounted for using
the purchase method.
In 1998, Sundstrand had approximately $2 billion in revenues and $226
million in net income. Despite the expected increase in interest expense and
amortization of goodwill associated with the merger, UTC anticipates that the
acquisition will be slightly accretive to earnings per share in 1999, with
accretion accelerating in later periods.
UTC plans to finance the cash portion of the purchase price through the
incurrence of long-term and medium-term debt, and cash from the sale of UT
Automotive, discussed below. If the Sundstrand acquisition precedes the sale of
UT Automotive, UTC plans to use short-term debt instead of the cash mentioned
above. These financings will result in higher interest expense in future
periods and higher levels of debt to capital.
On March 16, 1999, UTC announced an agreement to sell UT Automotive to Lear
Corporation for $2.3 billion in cash. The sale is expected to close before the
acquisition of Sundstrand, in which case UTC plans to use $889 million of the
proceeds from the sale to fund a part of the acquisition price. If the sale
closes after the acquisition of Sundstrand, UTC plans to use the same amount of
proceeds to retire the additional short-term indebtedness that UTC will incur
in connection with the acquisition. The sale is subject to certain closing
conditions including Hart-Scott-Rodino Act review.
For further information on the acquisition and the sale described in this
section, including important pro forma financial information, please see our
Current Report on Form 8-K dated April 14, 1999, which is incorporated by
reference in this prospectus.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
---- ----- ----- ----- -----
<S> <C> <C> <C> <C>
7.59 7.10 5.76 4.93 3.78
</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 pro-forma ratio of earnings to fixed charges for the year ended
December 31, 1998, 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 $889 million of the proceeds from the sale to
fund a part of the acquisition price, as if these transactions had occurred on
January 1, 1998.
3
<PAGE>
<TABLE>
<CAPTION>
United
Technologies
Pro Forma
Year Ended
December 31,
1998
------------
<S> <C>
Fixed Charges:
Interest expense $ 297
Interest capitalized 13
One-third of rents 81
------
Total Fixed Charges $ 391
======
Earnings:
Income from continuing operations before income taxes and
minority interests $2,007
Fixed charges per above 391
Less: interest capitalized (13)
------
378
Amortization of interest capitalized 31
------
Total Earnings $2,416
======
Ratio of Earnings to Fixed Charges 6.18
======
</TABLE>
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 financing of our pending acquisition of Sundstrand, other possible
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
4
<PAGE>
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 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,
5
<PAGE>
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.
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.
6
<PAGE>
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 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;
7
<PAGE>
. 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;
. 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,
8
<PAGE>
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 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
9
<PAGE>
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
. 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
10
<PAGE>
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 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
11
<PAGE>
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 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).
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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.
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
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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
. 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)
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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;
. 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).
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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 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
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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 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
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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 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,
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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
. 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
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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
. 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
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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).
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
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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.
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
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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 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
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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 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
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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;
. 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
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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 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
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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 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.
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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
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;
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. 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
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
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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).
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
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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;
. 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,
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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 incorporated in this Prospectus by
reference to the Annual Report on Form 10-K of United Technologies Corporation
for the year ended December 31, 1998 have been so incorporated in reliance on
the report of Pricewaterhouse- Coopers LLP, independent accountants, given on
the authority of said firm as experts in auditing and accounting.
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 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.
. Current Reports on Form 8-K filed with the SEC on February 23, March
19 and April 14, 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.
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$400,000,000
6 1/2% Notes due 2009
[LOGO] United Technologies
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PROSPECTUS SUPPLEMENT
May 19, 1999
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Salomon Smith Barney
Goldman, Sachs & Co.
Merrill Lynch & Co.
J.P. Morgan & Co.
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