Prospectus Supplement
(To Prospectus Dated May 2, 2000)
$500,000,000
5% Convertible Subordinated Notes due February 1, 2007
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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>
AIG Soundshore
Opportunity Holding
Fund Ltd 3,000,000 0.60% 41,995 0.0%
Allstate Insurance
Company 2,125,000 0.43% 29,746 0.0%
Boulder II Limited 11,000,000 2.20% 153,981 0.2%
Chrysler Corporation
Master Retirment Trust 6,465,000 1.29% 90,499 0.1%
Delta Airlines
Master Trust 2,440,000 0.49% 34,156 0.0%
Elf Aquitaine 100,000 0.02% 1,400 0.0%
First Republic Bank 180,000 0.04% 2,520 0.0%
Goldman Sachs and
Company 584,000 0.12% 8,175 0.0%
Granville Capital
Corporation 29,400,000 5.88% 411,550 0.4%
J.P. Morgan Securities
Inc. 15,100,000 3.02% 211,374 0.2%
Morgan Stanley Dean
Witter 5,000,000 1.00% 69,992 0.1%
Motion Picture Industry
Health Plan - Active
Member Fund 750,000 0.15% 10,499 0.0%
Motion Picture Industry
Health Plan - Retiree
Member Fund 375,000 0.08% 5,249 0.0%
OCM Convertible Trust 2,500,000 0.50% 34,996 0.0%
Onex Industrial Partners
Limited 1,000,000 0.20% 13,998 0.0%
Oxford, Lord Abbett + Co. 800,000 0.16% 11,199 0.0%
Partners Reinsurance
Company Ltd. 1,350,000 0.27% 18,898 0.0%
Pebble Capital Inc. 1,250,000 0.25% 17,498 0.0%
Robertson Stephens 7,000,000 1.40% 97,988 0.1%
Silvercreek Limited
Partnership 4,250,000 0.85% 59,493 0.1%
Southern Farm Bureau
Life Insurance 875,000 0.18% 12,249 0.0%
State Employees'
Retirement Fund of
State of Delaware 3,275,000 0.66% 45,844 0.0%
State of Connecticut
Combined Investment
Funds 7,275,000 1.46% 101,838 0.1%
Vanguard Convetible
Securities Fund, Inc. 6,870,000 1.37% 96,168 0.1%
</TABLE>
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The Date of This Prospectus Supplement Is August 9, 2000.
