Exhibit 10.63
June 10, 2009
Edward T. Colligan
Dear Ed:
This letter confirms our agreement
concerning your departure from Palm, Inc. (referred to in this
letter as “Palm” or the
“Company”).
You hereby resign as CEO, President
and director of Palm, effective June 12, 2009, and as an
employee of Palm and an officer or director of any of Palm’s
subsidiaries effective July 12, 2009 (hereinafter the
“Termination Date”). Further, you hereby resign any
other positions that you may hold as a representative of Palm or at
the request of Palm, also effective as of the Termination
Date.
In satisfaction of Palm’s
obligations under the Severance Agreement between you and the
Company, amended and restated as of December 16, 2008
(hereinafter the “Severance Agreement”), provided you
have signed and not revoked the Release Agreement attached hereto
as Exhibit A , Palm will furnish you or, upon your death,
your beneficiary of your estate, the following benefits:
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1.
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Palm will pay
you a total of $1,200,000, less all applicable federal and state
withholding taxes, which amount shall be paid in (a) twelve
equal consecutive monthly installments of $66,666.67 each,
commencing August 12, 2009, and (b) an additional single
lump sum in the amount of $400,000, payable on July 12,
2010.
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2.
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(a) All options (set forth on
Schedule I attached hereto) granted to you to purchase Palm stock
that are unvested and unexpired on the Termination Date and that
otherwise would have vested (solely by virtue of your continued
employment with the Company and not, directly or indirectly, due to
a change of control of the Company as defined in the Management
Retention Agreement between you and the Company amended and
restated effective as of December 16, 2008, hereinafter
“Management Retention Agreement”) during the twelve
(12) month period commencing on the Termination Date shall
become vested and exercisable on July 31, 2009. (b) In
addition, provided that you comply with all of the terms of
paragraphs 11-15 below, all options granted to you to purchase Palm
stock that are unvested and unexpired on the Termination Date and
that otherwise would have vested (solely by virtue of your
continued employment with the Company and not, directly or
indirectly, due to a change of control of the Company as defined in
the Management Retention Agreement between you and the Company
amended and restated effective as of December 16, 2008,
hereinafter “Management Retention Agreement”)
on
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Edward T. Colligan
June 10, 2009
Page 2
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or prior to the end of the six
(6) month period commencing on the first anniversary of the
Termination Date shall remain outstanding and become vested and
exercisable on July 12, 2010. (c) All other unvested
options will be forfeited on the Termination Date.
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3.
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All options
granted to you to purchase Palm stock that are vested but
unexercised as of the Termination Date or that will become vested
and exercisable pursuant hereto following the Termination Date, and
provided that you comply with all of the terms of paragraphs 11-15
below, shall remain outstanding and exercisable during the longer
of the eighteen (18) month period commencing on the
Termination Date or the period provided under the applicable stock
option agreement.
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4.
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Those shares of
restricted Palm stock that you have purchased from the Company
under Grant Number R0000185 and that remain subject to a right of
repurchase on the Termination Date will vest and the
Company’s right of repurchase will terminate with respect
thereto effective on the Termination Date. This will confirm that
those shares of restricted stock that you have purchased from the
Company under Grant Numbers R0000168, R0000178 and R0000183 will be
fully vested in accordance with their terms as of June 6,
2009.
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5.
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Those shares of
restricted Palm stock that you have purchased from the Company
under Grant Number R0000186 and that remain subject to a right of
repurchase on the Termination Date will vest, and the
Company’s right of repurchase with respect thereto will
terminate, on the Termination Date if such shares otherwise would
have vested and the Company’s right of repurchase would have
terminated pursuant the terms of Grant Number R0000186, amended as
provided herein, during the eighteen (18) month period
commencing on the Termination Date solely by virtue of your
continued employment with the Company and not, directly or
indirectly, due to a change of control of the Company as defined in
the Management Retention Agreement. Prior to the Termination Date,
Palm will amend Grant Number R0000186 to reflect that all
performance-based vesting criteria to which that grant is subject,
if any, shall be deemed achieved in full as of the Termination
Date.
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6.
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(a) Those restricted stock units
(also known as performance shares) with respect to Company stock
granted to you under Grant Number PS000800 that are unvested and
unexpired on the Termination Date will vest and be paid effective
as of the Termination Date if such shares otherwise would have
vested pursuant to the terms of Grant Number PS000800, amended as
provided herein, during the twelve (12) month period
commencing on the Termination Date solely by virtue of your
continued employment with the Company and not, directly or
indirectly, due to a change of control of the Company as defined in
the Management Retention Agreement. (b) In addition, provided
that you comply with all of the terms of paragraphs 11-15
below, those restricted stock units with respect to Company stock
granted to you under Grant Number PS000800 that
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Edward T. Colligan
June 10, 2009
Page 3
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are unvested and unexpired on the
Termination Date and that otherwise would have vested (solely by
virtue of your continued employment with the Company and not,
directly or indirectly, due to a change of control of the Company
as defined in the Management Retention Agreement) on or prior to
the end of the six (6) month period commencing on the first
anniversary of the Termination Date, shall remain outstanding and
become vested and be paid July 12, 2010. (c) All other
unvested restricted stock units will be forfeited on the
Termination Date. (d) Prior to the Termination Date, Palm will
amend Grant Number PS000800 to reflect that all performance-based
vesting criteria to which that grant is subject, if any, shall be
deemed achieved in full as of the Termination Date.
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7.
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The Company
will pay the premiums otherwise payable by you and your eligible
dependents for health, dental and vision benefits coverage for up
to eighteen (18) months beginning on the Termination Date, or
until you become eligible for group insurance benefits from another
employer, whichever comes first, provided you elect continuation
coverage under the Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended (“COBRA”), within the time period
prescribed under COBRA. After the eighteen (18) month period,
you will be responsible for the payment of any COBRA premiums. The
Company will not reimburse you for any taxable income imputed to
you because the Company has paid your COBRA premiums or those of
your eligible dependents.
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8.
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On the
Termination Date you will receive payment of your accrued but
unused vacation time through the Termination Date and, following
your submission of proper expense reports, the total unreimbursed
amount of all expenses incurred by you in connection with your
employment with Palm that are reimbursable in accordance with the
Company’s policies.
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9.
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For a period of
twelve (12) months from the Termination Date, neither Palm (in
Company sanctioned communications) nor any of Palm’s officers
(as that term is defined in 17 C.F.R. § 240.16a-1(f)) and
directors will directly or indirectly disparage, criticize or
otherwise make derogatory statements about you to any person or
make any public statement or statements to analysts or the press
concerning you (except to the extent consistent with the Company
press release and Q&A attached hereto as Exhibit C or as
otherwise required by law). The foregoing restrictions will not
apply to any statements that are made truthfully in response to a
subpoena or other compulsory legal process.
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You hereby acknowledge and agree
that the Company is authorized to withhold, or cause to be
withheld, from any payment or benefit under this letter agreement
the full amount of any applicable withholding taxes. You further
acknowledge and agree that, except as provided above, no further
additional or other sums, benefits or consideration are due and
owing, or will hereafter become due and owing, to you in
consideration of your employment with Palm, other than payment of
such benefits as have been accrued for your account under
Palm’s 401(k) plan prior to the Termination Date.
Edward T. Colligan
June 10, 2009
Page 4
In consideration of the foregoing, you
acknowledge and agree:
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10.
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On or about
July 12, 2009, you will execute the Release Agreement attached
to this letter agreement as Exhibit A (hereinafter, the
“Release Agreement”).
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11.
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You will comply
in all material respects with the provisions of the Employee
Agreement that you signed effective the first day of your
employment with Palm (the “Employee Agreement”), a copy
of which is attached hereto as Exhibit B for your
information.
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12.
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You will return
on or before the Termination Date any and all property of Palm,
including all tangible property and equipment and all notes, memos,
correspondence, computer-recorded information and any other
embodiment or reproduction (in whole or in part) of any Company
confidential or proprietary information, except that you may retain
your personal notes, diaries, Rolodex, calendars and correspondence
of a personal nature.
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13.
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Your right to
receive payment under paragraph 1(b) above and your right to
additional vesting under paragraphs 2(b) and 6(b) above, as well as
your continued ability to exercise your vested and unexercised
options under the extended exercise provisions of paragraph 3
above, shall terminate if, during the twelve (12) months
following the Termination Date, you directly or indirectly recruit,
solicit, induce or encourage any of the Company’s employees
to leave their employment. Nothing in this paragraph shall prevent
you from serving as a reference upon the request of any Company
employee.
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14.
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Your right to
receive payment under paragraph 1(b) above and your right to
additional vesting under paragraphs 2(b) and 6(b) above, as well as
your continued ability to exercise your vested and unexercised
options under the extended exercise provisions of paragraph 3
above, shal
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