Exhibit 10.43
 
 
 
 
PALM, INC.
 
MANAGEMENT RETENTION AGREEMENT
 
This Management Retention Agreement (the “Agreement”) is made and entered into
by and between R. Todd Bradley (the “Employee”) and Palm, Inc. (the “Company”),
effective as of the latest date set forth by the signatures of the parties
hereto below (the “Effective Date”). This Agreement supersedes and replaces the
Management Retention Agreement dated June 10, 2001 between the Employee and the
Company.
 
 
 
 
RECITALS
 
A.    It is expected that the Company from time to time will consider the
possibility of an acquisition by another company or other change of control. The
Board of Directors of the Company (the “Board”) recognizes that such
consideration can be a distraction to the Employee and can cause the Employee to
consider alternative employment opportunities. The Board has determined that it
is in the best interests of the Company and its stockholders to assure that the
Company will have the continued dedication and objectivity of the Employee,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below) of the Company.
 
B.    The Board believes that it is in the best interests of the Company and its
stockholders to provide the Employee with an incentive to continue his
employment and to motivate the Employee to maximize the value of the Company
upon a Change of Control for the benefit of its stockholders.
 
C.    The Board believes that it is imperative to provide the Employee with
severance benefits upon Employee’s termination of employment following a Change
of Control which provides the Employee with enhanced financial security and
provides incentive and encouragement to the Employee to remain with the Company
notwithstanding the possibility of a Change of Control.
 
D.    Certain capitalized terms used in the Agreement are defined in Section 6
below.
 
The parties hereto agree as follows:
 
1.    Term of Agreement.    This Agreement shall terminate upon the date that
all obligations of the parties hereto with respect to this Agreement have been
satisfied.
 
2.    At-Will Employment.    The Company and the Employee acknowledge that the
Employee’s employment is and shall continue to be at-will, as defined under
applicable law, and may be terminated by either party at any time, with or
without cause. If the Employee’s employment terminates for any reason, including
(without limitation) any termination prior to a

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Change of Control, the Employee shall not be entitled to any payments, benefits,
damages, awards or compensation other than as provided by this Agreement, or as
may otherwise be available in accordance with the Company’s established employee
plans or pursuant to other written agreements with the Company.
 
3.    Acceleration upon Change of Control.    Upon a Change of Control, 100% of
the shares subject to Employee’s then outstanding options to purchase shares of
the Company’s Common Stock (the “Options”) shall immediately vest and became
exercisable, but in no event shall the number of shares subject to such Options
which so vest exceed the total number of shares subject to such Options.
Additionally, 100% of the shares of the Company’s Common Stock then held by
Employee subject to a Company repurchase right (the “Restricted Stock”) shall
immediately vest and have such Company right of repurchase with respect to such
shares of Restricted Stock lapse, but in no event shall the number of shares
which so vest exceed the number of shares of Restricted Stock outstanding
immediately prior to the Change of Control. In all other respects, the Options
and Restricted Stock shall continue to be bound by and subject to the terms of
their respective agreements.
 
4.    Change of Control Severance Benefits.
 
(a)    Involuntary Termination other than for Cause, Death or Disability or
Voluntary Termination for Good Reason Following A Change of Control. If, within
twelve (12) months following a Change of Control, Employee’s employment with the
Company (or any subsidiary thereof) is terminated (i) involuntarily by the
Company (or any subsidiary thereof) other than for Cause, Death or Disability,
or (ii) by the Employee pursuant to a Voluntary Termination for Good Reason,
then, subject to Employee entering into a standard form of mutual release of
claims with the Company, the Company shall provide Employee with the following
benefits upon such termination:
 
(i)    Severance Payment.    A lump-sum cash payment in an amount equal to two
hundred percent (200%) of the Employee’s Annual Compensation;
 
(ii)    Continued Employee Benefits.    Company-paid health, dental, vision,
long-term disability and life insurance coverage at the same level of coverage
as was provided to such Employee immediately prior to the Change of Control and
at the same ratio of Company premium payment to Employee premium payment as was
in effect immediately prior to the Change of Control (the “Company-Paid
Coverage”). If such coverage included the Employee’s dependents immediately
prior to the Change of Control, such dependents also shall be covered at Company
expense. Company-Paid Coverage shall continue until the earlier of (i) two years
from the date of termination, or (ii) the date upon which the Employee and his
dependents become covered under another employer’s group health, dental, vision,
long-term disability or life insurance plans that provide Employee and his
dependents with comparable benefits and levels of coverage. For purposes of
Title X of the Consolidated Budget Reconciliation Act of 1985 (“COBRA”), the
date of the “qualifying event” for Employee and his or her dependents shall be
the date upon which the Company-Paid Coverage commences, and each month of
Company-Paid Coverage provided hereunder shall offset a month of continuation
coverage otherwise due under COBRA;

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(iii)    Pro-Rated Bonus Payment.    A lump-sum cash payment equal to 100% of
such Employee’s target bonus as in effect for the fiscal year in which the
Change of Control occurs, pro-rated by multiplying such bonus amount by a
fraction, the numerator of which shall be the number of days prior to occurrence
of the Change of Control during such fiscal year, and the denominator of which
shall be three-hundred and sixty-five; and
 
Notwithstanding the foregoing, in the event the Employee is employed by a
subsidiary of the Company at the time of a Spin-Off of such subsidiary, then the
Employee shall not be deemed to have been terminated for Cause nor shall
Employee be permitted to terminate his or her employment pursuant to a Voluntary
Termination for Good Reason and receive the benefits provided for in this
Section 4(a) as a result of such Spin-Off, but rather the Former Subsidiary
shall assume the obligations under this Agreement as provided for in Section 8.
 
(b)    Voluntary Resignation; Termination For Cause.    If the Employee’s
employment terminates by reason of the Employee’s voluntary resignation (and is
not a Voluntary Termination for Good Reason), or if the Employee is terminated
for Cause, then the Employee shall not be entitled to receive severance or other
benefits except for those (if any) as may then be established under the
Company’s (or any subsidiary’s) then existing severance and benefits plans or
pursuant to other written assignments with the Company (or any subsidiary
thereof).
 
(c)    Disability; Death.    If the Employee’s employment with the Company (or
any subsidiary thereof) terminates as a result of the Employee’s Disability, or
if Employee’s employment is terminated due to the death of the Employee, then
the Employee shall not be entitled to receive severance or other benefits except
for those (if any) as may then be established under the Company’s (or any
subsidiary’s) then existing severance and benefits plans or pursuant to other
written agreements with the Company (or any subsidiary thereof).
 
(d)    Termination Apart from Change of Control.    In the event the Employee’s
employment is terminated for any reason, either prior to the occurrence of a
Change of Control or after the twenty-four (24) month period following a Change
of Control, then the Employee shall be entitled to receive severance and any
other benefits only as may then be established under the Company’s (or any
subsidiary’s) existing severance and benefits plans or pursuant to other written
agreements with the Company.
 
5.    Golden Parachute Excise Tax.
 
(a)    In the event it shall be determined that any payment or distribution by
the Company or other amount with respect to the Company to or for the benefit of
the Employee, whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise, but determined without regard to
any additional payments required under this Section 5 (a “Payment”), is (or will
be) subject to the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the “Code”) or any interest or penalties are (or will
be) incurred by the Employee with respect to the excise tax imposed by Section
4999 of the Code with respect to the Company (the excise tax, together with any
interest and penalties, are hereinafter collectively referred to as the “Excise
Tax”), the Employee shall be entitled to receive an additional cash payment (a
“Gross-Up Payment”) from the Company in an amount equal to the sum of the

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Excise Tax and an amount sufficient to pay the cumulative Excise Tax and all
cumulative income taxes (including any interest and penalties imposed with
respect to such taxes) relating to the Gross-Up Payment so that the net amount
retained by the Employee is equal to all payments to which Employee is entitled
pursuant to the terms of this Agreement (excluding the Gross-Up Payment) or
otherwise less income taxes (but not reduced by the Excise Tax or by income
taxes attributable to the Gross-Up Payment).
 
(b)    Subject to the provisions of subsection (c) of this Section 5, all
determinations required to be made under this Section 5, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at the determination, shall be made
by a nationally recognized certified public accounting firm selected by the
Company with the consent of the Employee, which should not unreasonably be
withheld (the “Accounting Firm”) which shall provide detailed supporting
calculations both to the Company and the Employee within 30 days after the
receipt of notice from the Employee that there has been a Payment, or such
earlier time as is requested by the Company. All fees and expenses of the
Accounting Firm shall be borne solely by the Company. The Company, as determined
in accordance with this Section 5, shall pay any Gross-Up Payment to the
Employee within five days after the receipt of the Accounting Firm’s
determination. If the Accounting Firm determines that no Excise Tax is payable
by the Employee, it shall so indicate to the Employee in writing. Any
determination by the Accounting Firm shall be binding upon the Company and the
Employee. As a result of uncertainty in the application of Section 4999 of the
Code at the time of the initial determination by the Accounting Firm, it is
possible that Gross-Up Payments that the Company should have made will not have
been made (an “Underpayment”), consistent with the calculations required to be
made hereunder. In the event the Company exhausts its remedies in accordance
with subsection (c) of this Section 5 and the Employee thereafter is required to
make a payment of any Excise Tax, the Accounting Firm shall determine the amount
of Underpayment that has occurred and the Underpayment shall be promptly paid by
the Company to or for the benefit of the Employee.
 
(c)    The Employee shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require a Gross-Up Payment
(that has not already been paid by the Company). The notification shall be given
as soon as practicable but no later than ten business days after the Employee is
informed in writing of the claim and shall apprise the Company of the nature of
the claim and the date on which the claim is requested to be paid. The Employee
shall not pay the claim prior to the expiration of the 30-day period following
the date on which the Employee gives notice to the Company or any shorter period
ending on the date that any payment of taxes with respect to the claim is due.
If the Company notifies the Employee in writing prior to the expiration of the
30-day period that it desires to contest the claim, the Employee shall:
 
(i)    give the Company any information reasonably requested by the Company
relating to the claim;
 
(ii)    take any action in connection with contesting the claim as the Company
shall reasonably request in writing from time to time, including, without
limitation, accepting legal representation with respect to the claim by an
attorney reasonably selected by the Company;

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(iii)    cooperate with the Company in good faith in order effectively to
contest the claim; and
 
(iv)    permit the Company to participate in any proceedings relating to the
claim.
 
The Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with the contest and
shall indemnify and hold the Employee harmless, on an after-tax basis, for any
Excise Tax or income tax (including interest and penalties with respect thereto)
imposed as a result of the representation and payment of costs and expenses.
Without limitation of the forgoing provisions of this Section 5, the Company
shall control all proceedings taken in connection with the contest and, at its
sole option, may pursue or forego any and all administrative appeals,
proceedings, hearings, and conferences with the taxing authority in respect of
the claim and may, at its sole option, either direct the Employee to pay the tax
claimed and sue for a refund or contest the claim in any permissible manner, and
the Employee agrees to prosecute the contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine. If the Company directs the
Employee to pay the claim and sue for a refund, the Company shall advance the
amount of the payment to the Employee, on an interest-free basis, and shall
indemnify and hold the Employee harmless, on an after-tax basis, from any Excise
Tax or income tax (including interest or penalties with respect thereto) imposed
with respect to the advance or with respect to any imputed income with respect
to the advance; and any extension of the statute of limitations relating to
payment of taxes for the taxable year of the Employee with respect to which the
contested amount is claimed to be due shall be limited solely to the contested
amount. The Company’s control of the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable hereunder and the Employee
shall be entitled to settle or contest, as the case may be, any other issue
raised by the Internal Revenue Service or any other taxing authority.
 
(d)    If, after the receipt by the Employee of an amount advanced by the
Company pursuant to subsection (c) of this Section 5, the Employee becomes
entitled to receive any refund with respect to the claim, the Employee shall,
subject to the Company’s compliance with the requirements of subsection (c) of
this Section 5, promptly pay to the Company the amount of the refund (together
with any interest paid or credited thereon after taxes applicable thereto). If,
after the receipt by the Employee of an amount advanced by the Company pursuant
to subsection (c) of this Section 5, a determination is made that the Employee
shall not be entitled to any refund with respect to the claim and the Company
does not notify the Employee in writing of its intent to contest the denial of
refund prior to the expiration of 30 days after the determination, then the
advance shall be forgiven and shall not be required to be repaid and the amount
of the advance shall offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid.
 
6.    Definition of Terms.    The following terms referred to in this Agreement
shall have the following meanings:
 
(a)    Annual Compensation.    “Annual Compensation” shall mean an amount equal
to the sum of (i) the Employee’s Company annual base salary as in effect
immediately preceding the Change of Control, and (ii) 100% of the Employee’s
Target Bonus.

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(b)    Target Bonus.    “Target Bonus” shall mean Employee’s annual bonus,
assuming 100% “on target” satisfaction of any objective or subjective
performance milestones.
 
(c)    Cause.    “Cause” shall mean (i) an act of personal dishonesty taken by
the Employee in connection with his responsibilities as an employee and intended
to result in substantial personal enrichment of the Employee, (ii) Employee
being convicted of a felony, (iii) a willful act by the Employee which
constitutes gross misconduct and which is injurious to the Company (or any
subsidiary thereof that employs the Employee at such time), (iv) following
delivery to the Employee of a written demand for performance from the Company
(or any subsidiary thereof that employs the Employee at such time) which
describes the basis for the Company’s (or any subsidiary’s) reasonable belief
that the Employee has not substantially performed his duties, continued
violations by the Employee of the Employee’s obligations to the Company (or any
subsidiary thereof that employs the Employee at such time) which are
demonstrably willful and deliberate on the Employee’s part.
 
(d)    Change of Control.    “Change of Control” means the occurrence of any of
the following events:
 
(i)    Any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) becomes the “beneficial owner” (as
defined in Rule 13d-3 under said Act), directly or indirectly, of securities of
the Company representing fifty percent (50%) or more of the total voting power
represented by the Company’s then outstanding voting securities; or
 
(ii)    The consummation of the sale or disposition by the Company of all or
substantially all the Company’s assets; or
 
(iii)    The consummation of a merger or consolidation of the Company with any
other corporation, other than a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least fifty percent (50%) of
the total voting power represented by the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation; or
 
(iv)    A change in the composition of the Board occurring within a two-year
period, as a result of which fewer than a majority of the directors are
Incumbent Directors. “Incumbent Directors” shall mean directors who either (A)
are directors of the Company as of the date upon which this Agreement was
entered into, or (B) are elected, or nominated for election, to the Board with
the affirmative votes of at least a majority of those directors whose election
or nomination was not in connection with any transaction described in
subsections (i), (ii), or (iii) above, or in connection with an actual or
threatened proxy contest relating to the election of directors to the Company;
or
 
(v)    The sale or disposition to third parties (other than pursuant to a
spin-off or similar transaction) by the Company of all or substantially all of
any of the Carrier, PCBU, Enterprise, Palm or comparable business units;
provided, however, that such transactions shall only

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constitute a “Change of Control” under this Agreement with respect to the
Section 16 executive officers working primarily for the sold or disposed
business unit immediately prior to the effective date of the Change of Control
who are not offered a comparable position within the Company.
 
(e)    Disability.    “Disability” shall mean that the Employee has been unable
to perform his duties as an employee of the Company (or any subsidiary thereof
that employs the Employee at such time) as the result of his incapacity due to
physical or mental illness, and such inability, at least 26 weeks after its
commencement, is determined to be total and permanent by a physician selected by
the Company or its insurers and acceptable to the Employee or the Employee’s
legal representative (such agreement as to acceptability not to be unreasonably
withheld). Termination resulting from Disability may only be effected after at
least 30 days’ written notice by the Company (or any subsidiary thereof that
employs the Employee at such time) of its intention to terminate the Employee’s
employment. In the event that the Employee resumes the performance of
substantially all of his duties hereunder before the termination of his
employment becomes effective, the notice of intent to terminate shall
automatically be deemed to have been revoked.
 
(f)    Former Subsidiary.    “Former Subsidiary” shall mean any former
subsidiary of the Company that ceases to be as such due to a Spin-Off.
 
(g)    Spin-Off.    “Spin-Off” shall mean the distribution of the securities of
a subsidiary of the Company to the Company’s stockholders at a time when the
Company owns at least 80% of such subsidiary’s securities.
 
(h)    Voluntary Termination for Good Reason.    “Voluntary Termination for Good
Reason” shall mean the Employee voluntarily resigns after the occurrence of any
of the following: (i) without the Employee’s express written consent, a material
reduction of the Employee’s duties, title, authority or responsibilities,
relative to the Employee’s duties, title, authority or responsibilities as in
effect immediately prior to such reduction, or the assignment to Employee of
such reduced duties, title, authority or responsibilities; provided, however,
that a reduction in duties, title, authority or responsibilities solely by
virtue of the Company being acquired and made part of a larger entity (as, for
example, when the senior vice-president of a business unit of the Company
remains as such following a Change of Control) shall not by itself constitute
grounds for a “Voluntary Termination for Good Reason;” (ii) without the
Employee’s express written consent, a material reduction, without good business
reasons, of the facilities and perquisites (including office space and location)
available to the Employee immediately prior to such reduction; (iii) a reduction
by the Company in the base salary of the Employee as in effect immediately prior
to such reduction; (iv) a material reduction by the Company in the aggregate
level of employee benefits, including bonuses, to which the Employee was
entitled immediately prior to such reduction with the result that the Employee’s
aggregate benefits package is materially reduced (other than a reduction that
generally applies to Company employees); (v) the relocation of the Employee to a
facility or a location more than thirty-five (35) miles from the Employee’s then
present location, without the Employee’s express written consent; (vi) the
failure of the Company to obtain the assumption of this agreement by any
successors contemplated in Section 8(a) below; or (vii) any act or set of facts
or circumstances which would, under California case law or statute constitute a
constructive termination of the Employee.

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7.    Non-Solicitation.    In consideration for the severance benefits Employee
is to receive herein, if any, Employee agrees that he or she will not, at any
time during the one year following his or her termination date, directly or
indirectly solicit any individuals to leave the Company’s (or any of its
subsidiaries’) employ for any reason or interfere in any other manner with the
employment relationships at the time existing between the Company (or any of its
subsidiaries) and its current or prospective employees.
 
8.    Assignment.
 
(a)    Company’s Successors / Former Subsidiary. Any successor to the Company
(whether direct or indirect and whether by purchase, merger, consolidation,
liquidation or otherwise) to all or substantially all of the Company’s business
and/or assets or any Former Subsidiary shall assume the obligations under this
Agreement and agree expressly to perform the obligations under this Agreement in
the same manner and to the same extent as the Company would be required to
perform such obligations in the absence of a succession. For all purposes under
this Agreement, the term Company shall include (i) any successor to the
Company’s business and/or assets which executes and delivers the assumption
agreement described in this Section 8(a) or which becomes bound by the terms of
this Agreement by operation of law, (ii) a Former Subsidiary.
 
(b)    Employee’s Successors. The terms of this Agreement and all rights of the
Employee hereunder shall inure to the benefit of, and be enforceable by, the
Employee’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
 
9.    Notice.
 
(a)    General. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or one day following mailing via Federal Express or similar
overnight courier service. In the case of the Employee, mailed notices shall be
addressed to him at the home address which he most recently communicated to the
Company in writing. In the case of the Company, mailed notices shall be
addressed to its corporate headquarters, and all notices shall be directed to
the attention of its Secretary.
 
(b)    Notice of Termination. Any termination of the Employee by the Company (or
any subsidiary thereof that employs the Employee at such time) for Cause or by
the Employee pursuant to a Voluntary Termination for Good Reason as contemplated
by Section 4(a) shall be communicated by a notice of termination to the other
party hereto given in accordance with Section 9(a) of this Agreement. Such
notice shall indicate the specific termination provision in this Agreement
relied upon, shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination under the provision so indicated, and
shall specify the termination date (which shall be not more than 30 days after
the giving of such notice). The failure by the Employee to include in the notice
any fact or circumstance which contributes to a showing of Voluntary Termination
for Good Reason shall not waive any right of the Employee hereunder or preclude
the Employee from asserting such fact or circumstance in enforcing his rights
hereunder.

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10.    Miscellaneous Provisions.
 
(a)    No Duty to Mitigate.    The Employee shall not be required to mitigate
the value of any benefits contemplated by this Agreement, nor shall any such
benefits be reduced by any earnings or benefits that the Employee may receive
from any other source.
 
(b)    Waiver.    No provision of this Agreement shall be modified, waived or
discharged unless the modification, waiver or discharge is agreed to in writing
and signed by the Employee and by two authorized officers of the Company (other
than the Employee). No waiver by either party of any breach of, or of compliance
with, any condition or provision of this Agreement by the other party shall be
considered a waiver of any other condition or provision or of the same condition
or provision at another time.
 
(c)    Whole Agreement.    No agreements, representations or understandings
(whether oral or written and whether express or implied), which are not
expressly set forth in this Agreement[, other than the employment offer letter
dated May 29, 2001], have been made or entered into by either party with respect
to the subject matter hereof. This Agreement [and the offer letter] represent[s]
the entire understanding of the parties hereto with respect to the subject
matter hereof and supersede[s] all prior arrangements and understandings
regarding same, including (but not limited to) the Management Retention
Agreement dated June 10, 2001 between the Employee and the Company.
 
(d)    Choice of Law.    The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California (without reference to its conflicts of law provisions).
 
(e)    Severability.    The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision hereof, which shall remain in full force and effect.
 
(f)    Counterparts.    This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together will constitute one
and the same instrument.
 
[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by its duly authorized officer, as of the day and year set forth
below.
 
 
COMPANY
     
PALM, INC.
           
By:
 
/s/    ERIC A. BENHAMOU

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Eric Benhamou
           
Title:
 
Chairman of the Board and Interim Chief Executive Officer
           
Date:
 
September 17, 2002

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EMPLOYEE
         
/s/    RICHARD TODD BRADLEY

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Date:
 
September 12, 2002

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