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Registration No. 33-78530
Rule 424(c)
PROSPECTUS SUPPLEMENT
TIMBERLINE SOFTWARE CORPORATION
225,000 Shares of Common Stock
This Prospectus Supplement is to the Prospectus dated May
25, 1994 (the "Prospectus") of Timberline Software Corporation
(the "Company") that forms a part of the Registration Statement
on Form S-3 (Registration No. 33-78530) declared effective by the
Securities and Exchange Commission (the "Commission") on May 25,
1994 under the Securities Act of 1933, as amended. This
Prospectus Supplement should be read in conjunction with the
Prospectus and is considered an integral part of the Prospectus.
The Prospectus covers the offer and sale by McDonald's
Corporation of 225,000 shares of Common Stock, no par value, of
the Company ("Common Stock"). Subject to adjustment in certain
events, the Common Stock is issuable by the Company through March
10, 2001 upon exercise by McDonald's Corporation of warrants (the
"Warrants") issued to McDonald's Corporation on March 10, 1994.
The number of shares of Common Stock issuable upon exercise of
the Warrants has been increased from 100,000 shares to 225,000
shares to reflect two separate 3-for-2 stock splits of the Common
Stock effective in May 1995 and May 1996, respectively.
McDonald's Corporation has exercised the Warrants with
respect to 56,250 shares of Common Stock. The Company will
receive $175,000 pursuant to such exercise. The Company has been
advised that McDonald's Corporation intends to sell such shares
from time to time at prevailing market prices, that such sales
will be made through Salomon Brothers Inc, as agent, and that
total discounts and commissions on such sales will not exceed
$.05 per share.
McDonald's Corporation previously exercised Warrants with
respect to 168,750 shares of Common Stock (adjusted to reflect
both stock splits identified above), all of which shares have
been sold by McDonald's Corporation. McDonald's Corporation does
not own any more Warrants to purchase shares of Common Stock of
the Company.
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS OCTOBER 21, 1996
