SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment No. )
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[ ] Preliminary Proxy Statement
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14a-6(e)(2))
[ ] Definitive Proxy Statement
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[X] Soliciting Material Pursuant toss.240.14a-12
Rational Software Corporation
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(Name of Registrant as Specified in its Charter)
International Business Machines Corporation
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Filed by International Business Machines Corporation
Pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: Rational Software Corporation
Commission File No.: 000-12167
General Employment
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Q1. I'd like more detailed information about IBM's benefits and policies. How
will this information be provided to me?
A. A team of IBM HR Transition Managers will be working with Rational's HR
Managers on-site, at major Rational locations, over the next 90 days to help
educate employees about IBM's benefits and policies. This information will
help transition Rational employees to IBM employment once the transaction
closes. During the weeks of December 16th and January 6th, the teams will be
holding two-hour information sessions for employees to provide an overview of
IBM benefits and answer questions. Information sessions about the IBM medical,
dental & vision plans will be held in early January.
Also in early January, each US based Rational employee will receive a detailed
information packet from IBM containing important benefit enrollment
information. This packet will be mailed to your home and will contain
information about the IBM medical, dental & vision plans offered in your local
area which will help you plan for the transition to IBM when the transaction
closes. Employees located in smaller sites will be contacted directly by the
HR transition teams.
Please also continue to watch the Rational/IBM extranet site for updates. If
you have questions specific to your personal situation, feel free to contact
your Rational HR Generalist who will work with their IBM counterpart to help
provide additional information.
Q2. Will I receive IBM service credit if I have prior work history with IBM?
A. Given all the different possible employment circumstances, we cannot
provide a single answer about prior IBM service credit in this Q&A. The IBM
Employee Services Center will be reviewing each case on an individual basis
and those affected employees will hear from the Center approximately 2 months
after their first day of IBM employment.
Q3. Does our Rational seniority count towards IBM's vacation eligibility,
401(k) vesting, etc.?
A. Rational service will count for purposes of determining vacation
eligibility under the IBM Vacation Plan. Rational service will not count for
any purposes under the IBM Pension Plan or IBM Future Health Account. Employer
matching contributions under the IBM Savings Plan are 100% vested immediately.
Q4. Will there be a new confidentiality/noncompete agreement to sign, and if
so is a copy available?
A. IBM will be providing Rational employees with several mandatory employment
documents prior to the close, including an agreement concerning confidential
information, intellectual property, and other related matters. These documents
will be posted on the extranet within the next week. You will be asked to
print these documents, sign, and return these documents to your Rational HR
Generalist by a date to be provided.
These are similar to the pre-employment documents IBM would request of any
newly hired employee in the US. In the unlikely event the close does not
occur, these documents will be destroyed. You will learn more about these
documents at the employee information sessions being held the week of December
16th and January 6th.
Q5. How does the IBM drug testing policy work? Are current employees tested
randomly?
A. Effective June 3, 2002, IBM suspended pre-employment drug testing. Instead,
IBM requires each new employee to review and sign the Drug Free Workplace Act
of 1988 document, which is one of the mandatory employment documents. This
3-page document explains in detail IBM's substance abuse and drug testing
policy.
Q6. Do you know what the policy will be for people who currently work
part-time? Will we be allowed to continue our jobs as they are currently
defined?
A. IBM encourages flexible work/life programs and some people at IBM work on a
part-time basis. The transition to IBM employment will not affect currently
approved part-time work schedules at Rational. IBM employees
who work a minimum of 20 hours per week and not more than 32 hours per week
are considered part-time.
Vacation Time
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Q7. Do we have the option to be paid out for any Rational vacation time
carried over to IBM (instead of having to use it)?
A. There is no provision for a payout of your unused Rational vacation time.
Please see question C13 of the first Q&A document for a description of how you
will be expected to use your accrued, unused Rational vacation time will be
carried over to IBM after the close.
Q8. I will not be carrying over any Rational vacation time and I will
initially receive 2 weeks of vacation per year under the IBM Vacation Plan. I
have already made vacation plans in 2003 for the 3 weeks of time I expected
under the Rational vacation policy. What should I do?
A. IBM managers have the ability to grant additional time off, with or without
pay, to employees at their discretion, based upon employee circumstances. An
member of the HR transition team can provide you with more information about
the flexibility of IBM's time off policies relative to your personal
situation. We also encourage you to discuss your plans for time off with your
manager.
Q9. Under the IBM Vacation Plan, if I carry any vacation over to the next
calendar year, even if it's 1 day, do I earn vacation at a lower rate the
following year? Is the idea that you never have more on the books that what
you can earn in a year
A. Under the IBM Vacation Plan, vacation earned but not used is considered
excess and is carried over to the following year with a resulting reduction to
the following year's vacation
For example: In 2002, an employee uses 10 of 15 vacation days. As a result,
the employee will retain the 5 days in 2003 but will earn only 10 new days for
2003 instead of 15 in 2003 so the total is still 15 days
For 2003 and 2004, special rules will apply to vacation days carried over from
the Rational vacation policy. Please see question C13 in the first Q&A
document for an explanation of how this will work.
Q10. After closing, how will our vacation time be determined at IBM?
A. After close, you will begin to accrue IBM vacation time in accordance with
the IBM Vacation Plan. Your combined Rational and IBM service will be
recognized for the purposes of IBM vacation accrual. Refer to the IBM Vacation
Accrual table in question C12 of the first Q&A document for more detail.
Employees with 5 or more years of combined Rational and IBM service will
accrue more than 2 weeks of vacation per year.
Retirement Benefits
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Q11. I have questions about IBM's retirement benefits, including eligibility
guidelines for the Future Health Account. Where can I get answers?
A. Information about IBM's pension plan and Future Health Account will be
provided at the employee information sessions being held the weeks of December
16th and January 6th. IBM HR Transition Managers will be present to answer
your questions. If you work at a smaller site, the HR Transition teams will be
contacting you individually in the coming weeks to answer your questions.
Q12. What will happen to the Rational 401(K) Plan? Will it rollover to the IBM
401(k) plan automatically?
The Rational and IBM benefits teams will be working together to determine the
proper handling of the Rational 401(k) Plan after the close. As soon as the
team has determined the proper transition plan, it will be communicated to
everyone.
Q13. How can I learn more about IBM's 401(k) plan? Does the IBM 401(k) plan
allow loans?
A. More information about the IBM Savings Plan will be provided at the
employee information sessions being held during the weeks of December 16th and
January 6th. The IBM Savings Plan has a loan provision.
Q14. Are 401(k) deferrals under the IBM plan permitted from commissions?
A. The IBM Savings Plan permits deferrals from your compensation (as defined
in the Plan). This includes base salary, variable pay, commissions, sickness
and accident payments, vacation pay, and overtime.
Medical, Sickness and Accident
Q15. Does the IBM medical plan cover pre-existing conditions (that is those
conditions which exist on the date I begin coverage under the IBM medical
plan)?
A. Yes, pre-existing conditions are covered under all of IBM's medical plan
options.
Q16, Does IBM offer Kaiser? Who will our health insurance carriers be?
A. IBM offers a comprehensive and competitive array of medical benefits
options giving you the choice and flexibility to design a program that meets
your needs.You will be provided with the list of the medical plan options IBM
offers in your area based on the zip code of your residence. A home mailing
with full particulars will be mailed to your home address in early January.
Q17. Where can I get more information about IBM's benefits for short-term
sicknesses and long-term disability?
A. Short-term sicknesses -
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If you can't work because of a sickness or accident, you can continue to
receive 100% of your regular salary for a maximum of 52 weeks in a period
of 24 consecutive months under the IBM Sickness and Accident (S&A) Benefits
Plan s long as you remain eligible. Eligible employees participate in the plan
as of their first day at work as an IBM employee.
Long-term Disability Plan
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The IBM Long-Term Disability Plan provides benefits if you become permanently
disabled and unable to work -- payments that can continue until you reach age
65, as long as you remain eligible. Plan benefits begin after the exhaustion
of your IBM Sickness and Accident benefits. The benefit is 66 2/3 percent of
your regular salary (when combined with other sources of disability income)
Information about IBM's benefits for short-term sicknesses and long-term
disability will be provided at the employee information sessions held the week
of December 16th and January 6th. We also anticipate providing more detailed
IBM benefit and policy information in January.
In connection with the merger, Rational has filed preliminary proxy materials
and has filed and will file other relevant documents concerning the
transaction with the Securities and Exchange Commission (SEC). STOCKHOLDERS OF
RATIONAL ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT AND ANY OTHER
RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY
CONTAIN IMPORTANT INFORMATION. Investors and security holders can obtain free
copies of the definitive proxy statement and other documents when they become
available by contacting Investor Relations, Rational Software Corporation,
18880 Homestead Road, Cupertino, CA 95014 (Telephone: (408) 863-9900). In
addition, documents filed with the SEC by Rational are available free of
charge at the SEC's web site at www.sec.gov.
Information regarding the identity of the persons who may, under SEC
rules, be deemed to be participants in the solicitation of stockholders of
Rational in connection with the transaction, and their interests in the
solicitation, is set forth in the preliminary proxy materials that were filed
by Rational with the SEC on December 11, 2002.
Forward-Looking Statements
Except for historical information contained herein, statements contained
in this document may constitute "forward looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements are neither promises nor guarantees, but involve a number of risks,
uncertainties and other factors that could cause actual results to differ
materially from those set forth in the forward-looking statements, including,
without limitation, the risk that the merger may not be consummated in a
timely manner, if at all, risks regarding employee relations and other risks
concerning IBM and Rational and their respective operations that are detailed
in the periodic filings with the SEC of IBM and Rational, including their most
recent filings on Form 10-K or Form 10-Q.