Prospectus Supplement
(To Prospectus Dated May 2, 2000)
$500,000,000
5% Convertible Subordinated Notes due February 1, 2007
-------------------------
This prospectus supplement relates to the resale by the holders of
Rational Software Corporation 5% Convertible Subordinated Notes Due February
1, 2000 and the shares of common stock, $.01 par value per share, issuable
upon the conversion of the notes.
This prospectus supplement should be read in conjunction with, and may
not be delivered or utilized without, the prospectus dated May 2, 2000,
including any amendments or supplements thereto. The terms of the notes
are set forth in the prospectus.
The information in the table appearing under the heading "Selling
Securityholders" in the prospectus is amended by adding the information below
with respect to persons not previously listed in the prospectus or in any
amendments or supplements thereto, and by superceding the information with
respect to persons previously listed in the prospectus or in any amendments
or supplements thereto that are listed below:
<TABLE>
<CAPTION>
Principal
Amount at
Maturity of Number of
Notes Shares of
Beneficially Percentage of Common Stock Percentage of
Owned That Notes That May Common Stock
Name May Be Sold Outstanding Be Sold Outstanding
----------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
AMSouth Bank, Custodian
for AMSouth Equity
Income Fund 2,650,000 0.53% 74,191 0.0%
Baptist Health of
South Florida 171,000 0.03% 4,787 0.0%
Banc of America
Securities LLC 55,000 0.01% 1,540 0.0%
Boston Museum of
Fine Art 104,000 0.02% 2,912 0.0%
Goldman Sachs and
Company 200,000 0.04% 5,599 0.0%
Pilgrim Convertible
Fund 4,664,000 0.93% 130,576 0.1%
Ramius Capital Group
Holding Ltd. 1,900,000 0.38% 53,194 0.0%
San Diego County
Convertible 2,242,000 0.45% 62,768 0.0%
Zurich HFR Master
Hedge Fund Index Ltd 50,000 0.01% 1,400 0.0%
</TABLE>
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The Date of This Prospectus Supplement Is October 4, 2000.
