EXHIBIT 99.01
Handspring, Inc. Palm, Inc
Christopher Downing Marlene Somsak
Ruder Finn/Switzer, Inc. 408.503.2592
(415) 348-2733 MARLENE.SOMSAK@CORP.PALM.COM
DOWNINGC@RUDERFINNSWITZER.COM
HANDSPRING AND PALM AGREE TO SETTLEMENT OF LAWSUITS CONCERNING ACQUISITION
MOUNTAIN VIEW, Calif. and MILPITAS, Calif., October 21
/PRNewswire-FirstCall/ -- Handspring, Inc. (Nasdaq: HAND) and Palm, Inc.
(Nasdaq: PALM) today jointly announced that they had entered into a memorandum
of understanding with counsel to the plaintiffs in two lawsuits relating to the
proposed acquisition of Handspring by Palm. The lawsuits, Kathleen Goldhirsch v.
Handspring, Inc. and Varant Majarian v. Handspring, Inc., were filed June 17 and
June 19, 2003, respectively, in the Court of Chancery in the State of Delaware,
New Castle County.
Under the terms of the memorandum, Handspring, Palm and the plaintiffs
to the above-named actions have agreed, subject to approval by the court, to
enter into a settlement with respect to all claims raised by the plaintiffs to
the lawsuit. If the court approves the settlement contemplated in the
memorandum, the lawsuits will be dismissed. The terms of the settlement
contemplated by the memorandum require that additional disclosure be made
concerning the merger. This disclosure is contained in a Form 8-K filed by
Handspring today with the Securities and Exchange Commission. The parties also
agreed that plaintiffs may seek attorneys' fees and costs in the amount of
$215,000 that Handspring will pay if the attorney's fees and costs are granted
by the court. There will be no other settlement payment by Handspring or Palm.
However, there can be no assurance that the court will approve the proposed
settlement or that any ultimate settlement will be under the same terms as those
contemplated by the memorandum.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
On July 3, 2003, in connection with the proposed reorganization transaction
involving Palm, PalmSource and Handspring, Palm filed with the SEC a
Registration Statement on Form S-4 containing a proxy statement/prospectus. In
addition, on July 3, 2003, PalmSource filed with the SEC a Registration
Statement on Form S-4 containing a prospectus relating to the distribution of
PalmSource shares to the existing stockholders of Palm. Investors and security
holders are urged to read these filings, and any amendments to these filings,
because they contain important information about the reorganization transaction
described herein. Investors and security holders may obtain free copies of these
documents and other documents filed with the SEC at the SEC's web site at
www.sec.gov. In addition, investors and security holders may obtain free copies
of the documents filed with the SEC by Palm by contacting of Palm Investor
Relations (877.696.7256 or palm.ir@corp.palm.com). Investors and security
holders may obtain free copies of the documents filed with the SEC by Handspring
by contacting Handspring Investor Relations (650.230.5070 or
InvestorRelations@handspring.com). Investors and security holders may obtain
free copies of the documents filed with the SEC by PalmSource by contacting
PalmSource Investor Relations (Kip Meintzer at 408.400.3000 or
Kip.Meintzer@palmsource.com).
Palm and its directors and executive officers may be deemed to be participants
in the solicitation of proxies from the stockholders of Palm and Handspring in
connection with the reorganization transaction described herein. Information
regarding the special interests of these directors and executive officers in the
reorganization transaction described herein is set forth in the joint proxy
statement/prospectus dated September 26, 2003, as such filing may be amended
from time to time. PalmSource and its directors and executive officers also may
be deemed to be participants in the solicitation of proxies from the
stockholders of Palm and Handspring in connection with the reorganization
transaction described herein. Information regarding the special interests of
these directors and executive officers in the reorganization transaction
described herein is set forth in the joint proxy statement/prospectus dated
September 26, 2003. This document is available free of charge at the SEC's web
site at www.sec.gov and from Palm by contacting Palm Investor Relations
(877.696.7256 or palm.ir@corp.palm.com).
Handspring and its directors and executive officers also may be deemed to be
participants in the solicitation of proxies from the stockholders of Handspring
and Palm in connection with the reorganization transaction described herein.
Information regarding the special interests of these directors and executive
officers in the reorganization transaction described herein is set forth in the
proxy statement/prospectus, which is included in the Registration Statement on
Form S-4 filed by Palm with SEC on July 3, 2003. Additional information
regarding these directors and executive officers is also included in
Handspring's proxy statement for its 2002 Annual Meeting of Stockholders, which
was filed with the Securities and Exchange Commission on or about October 1,
2002. This document is available free of charge at the Securities and Exchange
Commission's web site at www.sec.gov and from Handspring by contacting
Handspring Investor Relations (650.230.5070 or
InvestorRelations@handspring.com).
ABOUT HANDSPRING, INC.
Handspring is a leading innovator in personal communications and handheld
computing. The company's products include the Treo wireless smartphones and
client and server software for fast Web access from handheld devices and mobile
phones. Today Handspring sells its products and accessories at
www.handspring.com and through select Internet, retail and carrier partners in
the United States, Europe, Asia, Australia, New Zealand, Canada, the Middle East
and Mexico/Latin America.
Handspring, the Handspring logo, Treo, and the Treo logo, are trademarks of
Handspring, Inc. and may be registered in certain jurisdictions. All other brand
names are trademarks of their respective owners.
ABOUT PALM, INC.
Information about Palm, Inc. is also available at http://www.palm.com/aboutpalm.
Palm is a trademark of Palm, Inc.
EXHIBIT 99.02
In considering the merger agreement and recommending to stockholders
that they approve it, Handspring's Board of Directors focused among other things
on the strategic aspects of a merger with Palm's Palm Solutions Group business
after the shares of PalmSource's common stock that are owned by Palm are
distributed to Palm's stockholders. Specifically, Handspring's Board focused on
the long-term value to Handspring stockholders of the merger, under which those
shareholders would own a significant percentage of the Palm Solutions Group
business and under which Palm will appoint three former Handspring board members
to the new Palm Board of Directors. As discussed in the Joint Proxy
Statement/Prospectus, the Handspring Board believes that the merger agreement is
in the best interests of Handspring stockholders.
The merger agreement does not contain any "collar" or similar
provision, which might be used in certain stock transactions to adjust the
consideration in the event of short-term volatility in the acquirer's stock
price prior to the close of the transaction. Such provisions may protect
stockholders in an acquired company against certain declines in the stock price
of the acquirer, and they can also limit the stockholders from benefiting if the
acquirer's stock rises. In addition, because the Palm Solutions Group business
will not trade independently until after the merger, a collar based on the
trading price or value of the Palm Solutions Group business would have been
difficult to establish. Based in part on information from its advisors,
Handspring did not believe that a collar was appropriate for the merger with
Palm because the transaction was based primarily on long-term strategic value
considerations and because negotiating to obtain a collar would likely have
resulted in other less favorable terms for Handspring shareholders.
In considering the value that would be provided to Handspring
stockholders in exchange for their stock, Handspring's Board of Directors and
advisors analyzed the value of the Palm Solutions Group business. As set forth
in the proxy, that analysis included assumptions about the hypothetical decrease
in the value of Palm as a result of the PalmSource distribution. At the time the
merger agreement was entered into, it was difficult to determine with any
precision the amount that Palm's value would decrease after the PalmSource
distribution, or the extent to which that decrease might imply a value of
PalmSource. However, Handspring's Board of Directors, based in part on
information from advisors, believed that the consideration to be received by
Handspring's stockholders would be such that approval of the merger agreement is
in the best interests of Handspring's stockholders. In making its recommendation
concerning the merger agreement, Handspring's Board of Directors was aware of
the investment by Sony in PalmSource, which is described in the Joint Proxy
Statement/Prospectus. Specifically, in October 2002, Sony invested $20 million
in PalmSource, purchasing 3,333,333 shares in PalmSource's Series A redeemable
convertible preferred stock, representing a 6.25% interest in PalmSource.
Handspring's Board of Directors was also aware that, as is described in the
Joint Proxy Statement/Prospectus, one of the analyses performed by Handspring's
financial advisors included assumptions about the extent to which the
hypothetical value of Palm after the PalmSource distribution would be lower than
prior to the PalmSource distribution.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
On July 3, 2003, in connection with the proposed reorganization transaction
involving Palm, PalmSource and Handspring, Palm filed with the SEC a
Registration Statement on Form S-4 containing a proxy statement/prospectus. In
addition, on July 3, 2003, PalmSource filed with the
SEC a Registration Statement on Form S-4 containing a prospectus relating to the
distribution of PalmSource shares to the existing stockholders of Palm.
Investors and security holders are urged to read these filings because they
contain important information about the reorganization transaction described
herein. Investors and security holders may obtain free copies of these documents
and other documents filed with the Securities and Exchange Commission at the
Securities and Exchange Commission's web site at www.sec.gov. In addition,
investors and security holders may obtain free copies of the documents filed
with the Securities and Exchange Commission by Palm by contacting of Palm
Investor Relations (877.696.7256 or palm.ir@corp.Palm.com). Investors and
security holders may obtain free copies of the documents filed with the
Securities and Exchange Commission by Handspring by contacting Handspring
Investor Relations (Bill Slakey at 650.230.5000 or bslakey@Handspring.com).
Investors and security holders may obtain free copies of the documents filed
with the Securities and Exchange Commission by PalmSource by contacting
PalmSource Investor Relations (Al Wood at 408.400.3000 or
Al.Wood@Palmsource.com).
Palm and its directors and executive officers may be deemed to be participants
in the solicitation of proxies from the stockholders of Palm and Handspring in
connection with the reorganization transaction described herein. Information
regarding the special interests of these directors and executive officers in the
reorganization transaction described herein is set forth in the proxy
statement/prospectus, which is included in the Registration Statement on Form
S-4 filed by Palm with the SEC on July 3, 2003. PalmSource and its directors and
executive officers also may be deemed to be participants in the solicitation of
proxies from the stockholders of Palm and Handspring in connection with the
reorganization transaction described herein. Information regarding the special
interests of these directors and executive officers in the reorganization
transaction described herein is set forth in the prospectus, which is included
in the Registration Statement on Form S-4 filed by PalmSource with the SEC on
July 3, 2003. This document is available free of charge at the Securities and
Exchange Commission's web site at www.sec.gov and from Palm by contacting Palm
Investor Relations (877.696.7256 or palm.ir@corp.Palm.com).
Handspring and its directors and executive officers also may be deemed to be
participants in the solicitation of proxies from the stockholders of Handspring
and Palm in connection with the reorganization transaction described herein.
Information regarding the special interests of these directors and executive
officers in the reorganization transaction described herein is set forth in the
proxy statement/prospectus, which is included in the Registration Statement on
Form S-4 filed by Palm with SEC on July 3, 2003. Additional information
regarding these directors and executive officers is also included in
Handspring's proxy statement for its 2002 Annual Meeting of Stockholders, which
was filed with the Securities and Exchange Commission on or about October 1,
2002. This document is available free of charge at the Securities and Exchange
Commission's web site at www.sec.gov and from Handspring by contacting
Handspring Investor Relations (Bill Slakey at 650.230.5000 or
bslakey@Handspring.com).