Palm Adopts Shareholders' Rights Plan

Palm, Inc. today announced that its board of directors has adopted a Shareholders' Rights Plan. Under the plan, Palm will issue a dividend of one right for each share of common stock -- par value of $0.001 per share -- of the company held by stockholders of record as of the close of business on Nov. 6, 2000. The plan is designed to assure stockholders fair value in the event of a future unsolicited business combination or similar transaction involving the company.

Each right will initially entitle stockholders to purchase a fractional share of the company's preferred stock for $370. However, the rights are not immediately exercisable and will become exercisable only upon the occurrence of certain events. Upon certain other events, unless redeemed for $0.001 per right, the rights will become exercisable by holders, other than rights held by an unsolicited party acquirer, for shares of the company or of the third-party acquirer having a value of twice the right's then-current exercise price. Further details of the plan are outlined in a letter that will be mailed to stockholders as of the record date.

Palm added that the plan was not adopted in response to any attempt to acquire the company, and that it is not aware of any such efforts.

I'm not a stock broker, nor do I play one on TV, so I have to admit I just barely followed this. Rather than try to summarize it and risk corrupting the facts, I'm simply running Palm's press release 'as is'.

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