Exhibit 10.37

Palm, Inc.

Management Retention Agreement

This Management Retention Agreement (the “Agreement”) is made and entered into
by and between Jonathan Rubinstein (the “Employee”) and Palm, Inc. (the
“Company”), effective on the Employee’s first day of employment with the Company
(the “Effective Date”).

RECITALS

A. It is expected that the Company from time to time may consider a Change of
Control (as defined below). 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 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
incentive and encouragement to remain with the Company notwithstanding the
possibility of a Change of Control.

D. Certain capitalized terms used in this Agreement are defined in Section 5
below.

The parties hereto agree as follows:

1. Term of Agreement. This Agreement shall commence on the Employee’s first day
of employment with the Company and 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 will be at-will, as defined under applicable law, and may
be terminated by either party at any time, with or without cause or notice. If
the Employee’s employment terminates for any reason, including (without
limitation) any termination prior to a 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, including the Employee’s Severance
Agreement.

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3. Change of Control Benefits.

(a) Equity Compensation. If a Change of Control occurs before the date that
Employee’s employment with the Company is terminated, or within three (3) months
following the date that the Employee’s employment with the Company is terminated
by the Company without Cause or by Employee for a Voluntary Termination for Good
Reason, then:

(i) One Hundred percent (100%) of the unvested portion of any stock option held
by the Employee shall be automatically accelerated in full so as to become
completely vested and shall have a post-termination of employment exercise
period equal to the earlier of the original option term or twelve (12) months
from Employee’s date of termination of employment.

(ii) One Hundred percent (100%) of the unvested portion of any restricted stock,
restricted stock units, performance shares or other Company equity compensation
held by the Employee shall be automatically accelerated in full so as to become
completely vested and shall be immediately paid, less any applicable tax
withholding.

(b) Involuntary Termination other than for Cause, Death or Disability or
Voluntary Termination for Good Reason Following A Change of Control. If, within
three (3) months prior to or 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 one hundred
percent (100%) of the Employee’s Annual Compensation, which shall be paid to the
Employee on the day following the six-month anniversary of such termination of
employment.

(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 shall also be covered at Company expense.
Company-Paid Coverage shall continue until the earlier of (A) two years from the
date of termination, or (B) 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 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, which shall be paid to
the Employee on the day following the six-month anniversary of such termination
of employment, equal to one hundred percent (100%) of the higher of
(A) Employee’s target bonus as in effect for the fiscal year in which the Change
of Control occurs or (B) Employee’s target bonus as in effect for the fiscal
year in which Employee’s termination occurs, pro-rated by multiplying such bonus
amount in clause (A) or (B), as applicable, by a fraction, the numerator of
which shall be the number of days prior to Employee’s termination during such
fiscal year, and the denominator of which shall be three hundred and sixty-five.

(c) 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 agreements with the Company (or any subsidiary
thereof).

(d) 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).

(e) Termination Apart from Change of Control. In the event the Employee’s
employment is terminated for any reason, either more than three (3) months prior
to the occurrence of a Change of Control or after the twelve (12) 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) then existing severance and benefits plans or
pursuant to other written agreements with the Company and the Employee’s
Severance Agreement.

4. Golden Parachute Excise Tax.

(a) In the event that the benefits provided for in this Agreement or otherwise
provided by the Company (or any subsidiary thereof) to the Employee (including,
but not by way of limitation, any accelerated vesting on equity awards) (the
“Total Payments”) would subject the Employee to an excise tax (the “Excise Tax”)
imposed under Section 4999 of the Internal Revenue Code of 1986, as amended (the
“Code”), then the Company (or any subsidiary thereof that employs the Employee
at such time) will pay the Employee (i) an amount sufficient to pay the excise
tax, and (ii) an additional amount sufficient to pay the Excise Tax and federal,
state and local income and employment taxes arising from the payments made by
the Company (or any subsidiary thereof that employs the Employee at such time)
pursuant to this sentence. Any amount required to be paid to the Employee
pursuant to the preceding sentence shall be referred to as the “Gross-Up
Payment.”

(b) The determination of the Employee’s Excise Tax liability and the amount, if
any, required to be paid under this Section 4 will be made in writing by
independent auditors at one of the four largest United States accounting firms
mutually agreed to by the Employee and the Company

 

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(the “Accountants”). For purposes of making the calculations required by this
Section 4, the Employee shall be deemed to pay federal, state and local income
taxes at the highest marginal rate in effect in the calendar year in which the
Gross-Up Payment will be made, based on the Employee’s residence. The
Accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of Sections 280G and 4999 of the Code. The Company
(or any subsidiary thereof that employs the Employee at such time) and the
Employee shall furnish to the Accountants such information and documents as the
Accountants may reasonably request in order to make a determination under this
Section 4. The Company will pay all costs the Accountants may reasonably incur
in connection with any calculations contemplated by this Section 4.

(c) The Accountants shall determine the Gross-Up Payment as soon as practicable
after (i) the Change of Control (but in no event later than 15 days after the
Change of Control), and also after (ii) the Employee’s termination of employment
(but in no event later than 15 days after the termination). In addition, the
Accountants shall make a determination of any Gross-Up Payment prior to a Change
of Control or the Employee’s termination of employment upon written request of
the Employee and assuming the Employee has a reasonable basis for believing that
he may be entitled to a Gross-Up Payment prior to the Change of Control or
termination of employment. The Gross-Up Payment shall be paid to the Employee
within five days after the Accountants’ determination. In the event that the
initial Gross-Up Payment made to the Employee is finally determined to be too
large or small, the following rules shall apply. If the initial Gross-Up Payment
was too small, the Company (or any subsidiary thereof that employs the Employee
at such time) shall promptly make an additional payment to the Employee equal to
the shortfall (plus any interest, penalties or additional amounts payable by
executive with respect to such excess). If the initial Gross-Up Payment is too
large, then the Employee shall repay the amount of the excess to the Company (or
any subsidiary that has made such payment to the Employee), plus interest on the
amount of such repayment at 120% of the applicable federal rate provided in
section 1274 of the Code, but only to the extent that such repayment by the
Employee would result in a dollar-for-dollar reduction in the Executive’s
taxable income and wages for purposes of federal, state and local income and
employment taxes). The Executive and the Company (or any subsidiary thereof that
employs the Employee at such time) shall each reasonably cooperate with the
other in connection with any administrative or judicial proceedings concerning
the existence or amount of the Excise Tax with respect to the Total Payments
(and associated income taxes, penalties and interest).

5. 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 annual base salary, and (ii) 100% of the Employee’s
Target Bonus, as in effect on the date of the Change of Control or Employee’s
termination, in each case, whichever is higher.

(b) Target Bonus. “Target Bonus” shall mean Employee’s annual bonus, assuming
100% “on target” satisfaction of any objective or subjective performance
milestones.

 

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(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 that negatively reflects on the Employee’s fitness to
perform his duties or harms the Company’s reputation in business,
(iii) Employee’s willful misconduct, which is injurious to the Company (or any
subsidiary thereof that employs the Employee at such time), or (iv) the
Employee’s failure to perform the duties of his position (as they may exist from
time to time) to the reasonable satisfaction of the Company’s Board of Directors
after receipt of a written warning and after the Employee has had thirty
(30) days to cure such failure to perform.

(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 who is not
already such as of the Effective Date of this Agreement; 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 entity, 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 or its parent) at least fifty
percent (50%) of the total voting power represented by the voting securities of
the Company or such surviving entity or its parent outstanding immediately after
such merger or consolidation; or

(iv) A change in the composition of the Board occurring within a one-year
period, as a result of which fewer than a majority of the directors are
Incumbent Directors. “Incumbent Directors” shall mean directors (A) who are
directors of the Company as of the date upon which this Agreement was entered
into, or (B) whose appointment or election is endorsed by a majority of the
members of the Board before the date of the appointment or election.

(e) Disability. “Disability” means the Employee being unable to perform the
principal functions of his duties due to a physical or mental impairment, but
only if such inability has lasted or is reasonably expected to last for at least
six months. The Company will determine whether a Disability exists based on
evidence provided by one or more physicians approved by the Company.

(f) Voluntary Termination for Good Reason. “Voluntary Termination for Good
Reason” shall mean the Employee voluntarily resigns after the occurrence of any
of the following without the Employee’s express written consent (i) 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; (ii) a material
reduction, without good business reasons, of

 

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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 working location more than thirty-five (35) miles from the
Employee’s facility or working location at such time; (vi) the failure of the
Company to obtain the assumption of this agreement by any successors
contemplated in Section 7(a) below; (vii) the requirement by the Company or any
successor to the Company that the Employee devote more than fifty percent of his
time to the Company’s (or its successor’s) business; (viii) the breach by the
Company of this Agreement, the Employee’s Offer Letter or Severance Agreement;
or (ix) any act or set of facts or circumstances which would, under California
case law or statute constitute a constructive termination of the Employee.

6. Non-Solicitation. In consideration for the severance benefits Employee is to
receive herein, if any, Employee agrees for a period of one year following his
termination date, he will not either 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
employees.

7. Assignment.

(a) Company’s Successors. 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
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 any such successor to the Company’s business and/or assets which
executes and delivers the assumption agreement described in this Section 7(a) or
which becomes bound by the terms of this Agreement by operation of law.

(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.

8. 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 General Counsel.

 

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(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 3(a) shall be communicated by a notice of termination to the other
party hereto given in accordance with Section 8(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.

9. 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 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. Executive and the Company agree to work in good
faith to consider amendments to this Agreement which are necessary or
appropriate to avoid imposition of any additional tax or income recognition
to Executive under Section 409A of the Internal Revenue Code and any proposed,
temporary or final Treasury Regulations and Internal Revenue Service guidance
thereunder. The parties agree to cooperate with each other and to take
reasonably necessary steps in this regard.

(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 have been made or entered into by either party with
respect to the subject matter hereof. This Agreement, together with the
Employee’s Offer Letter and Severance Agreement, represent the entire
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior arrangements and understandings regarding same.

(d) Choice of Law. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of California.

(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.

 

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(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.

 

Palm, Inc. By:  

/S/ RENA A. LANE

Title:  

Senior Vice President, Human Resources

Date:  

June 1, 2007

EMPLOYEE

/S/ JONATHAN RUBINSTEIN

Jonathan Rubinstein Date:  

June 2, 2007