Document:

Registrant's 2003 Equity Incentive Plan

 Exhibit 10.3 
  
 PALMSOURCE, INC. 
  
 2003 EQUITY INCENTIVE PLAN 
  
  

 TABLE OF CONTENTS 
  

	 	  	Page

	 SECTION 1 BACKGROUND AND PURPOSE
	  	1
			
	 1.1
	  	Background	  	1
	 1.2
	  	Purpose of the Plan	  	1
		
	 SECTION 2 DEFINITIONS
	  	1
			
	 2.1
	  	“1934 Act”	  	1
	 2.2
	  	“Affiliate”	  	1
	 2.3
	  	“Affiliated SAR”	  	1
	 2.4
	  	“Annual Revenue”	  	1
	 2.5
	  	“Award”	  	1
	 2.6
	  	“Award Agreement”	  	2
	 2.7
	  	“Board” or “Board of Directors”	  	2
	 2.8
	  	“Cash Position” means the Company’s level of cash and cash equivalents	  	2
	 2.9
	  	“Code”	  	2
	 2.10
	  	“Committee”	  	2
	 2.11
	  	“Company” means PalmSource, Inc	  	2
	 2.12
	  	“Consultant”	  	2
	 2.13
	  	“Director”	  	2
	 2.14
	  	“Disability”	  	2
	 2.15
	  	“Earnings Per Share”	  	2
	 2.16
	  	“Employee”	  	2
	 2.17
	  	“Exchange Program”	  	2
	 2.18
	  	“Exercise Price”	  	3
	 2.19
	  	“Fair Market Value”	  	3
	 2.20
	  	“Fiscal Year”	  	3
	 2.21
	  	“Freestanding SAR”	  	3
	 2.22
	  	“Grant Date”	  	3
	 2.23
	  	“Incentive Stock Option”	  	3
	 2.24
	  	“Individual Objectives”	  	3
	 2.25
	  	“Net Income”	  	3
	 2.26
	  	“Nonemployee Director”	  	3
	 2.27
	  	“Nonqualified Stock Option”	  	3
	 2.28
	  	“Operating Cash Flow”	  	3
	 2.29
	  	“Operating Income”	  	3
	 2.30
	  	“Option”	  	3
	 2.31
	  	“Participant”	  	3
	 2.32
	  	“Performance Goals”	  	4
	 2.33
	  	“Performance Share”	  	4
	 2.34
	  	“Performance Unit”	  	4
	 2.35
	  	“Period of Restriction”	  	4
	 2.36
	  	“Plan”	  	4
	 2.37
	  	“Registration Date”	  	4

  

 i 

 TABLE OF CONTENTS 
 (continued) 
  

	 	  	 	  	Page

	 2.38
	  	“Restricted Stock”	  	4
	 2.39
	  	“ Return on Assets”	  	4
	 2.40
	  	“Return on Equity”	  	4
	 2.41
	  	“Return on Sales”	  	4
	 2.42
	  	“Rule 16b-3”	  	4
	 2.43
	  	“Section 16 Person”	  	4
	 2.44
	  	“Shares”	  	4
	 2.45
	  	“Stock Appreciation Right” or “SAR”	  	5
	 2.46
	  	“Subsidiary”	  	5
	 2.47
	  	“Tandem SAR”	  	5
	 2.48
	  	“Termination of Service”	  	5
	 2.49
	  	“Total Shareholder Return”	  	5
		
	 SECTION 3 ADMINISTRATION
	  	5
			
	 3.1
	  	The Committee	  	5
	 3.2
	  	Authority of the Committee	  	5
	 3.3
	  	Delegation by the Committee	  	6
	 3.4
	  	Decisions Binding	  	6
		
	 SECTION 4 SHARES SUBJECT TO THE PLAN
	  	6
			
	 4.1
	  	Number of Shares	  	6
	 4.2
	  	Lapsed Awards	  	6
	 4.3
	  	Adjustments in Awards and Authorized Shares	  	6
		
	 SECTION 5 STOCK OPTIONS
	  	7
			
	 5.1
	  	Grant of Options	  	7
	 5.2
	  	Award Agreement	  	7
	 5.3
	  	Exercise Price	  	7
	 5.4
	  	Expiration of Options	  	7
	 5.5
	  	Exercisability of Options	  	8
	 5.6
	  	Payment	  	8
	 5.7
	  	Restrictions on Share Transferability	  	8
	 5.8
	  	Certain Additional Provisions for Incentive Stock Options	  	8
		
	 SECTION 6 STOCK APPRECIATION RIGHTS
	  	9
			
	 6.1
	  	Grant of SARs	  	9
	 6.2
	  	Exercise of Tandem SARs	  	9
	 6.3
	  	Exercise of Affiliated SARs	  	10
	 6.4
	  	Exercise of Freestanding SARs	  	10
	 6.5
	  	SAR Agreement	  	10
	 6.6
	  	Expiration of SARs	  	10
	 6.7
	  	Payment of SAR Amount	  	10
		
	 SECTION 7 RESTRICTED STOCK
	  	10

  

 ii 

 TABLE OF CONTENTS 
 (continued) 
  

	 	  	 	  	Page

	 7.1
	  	Grant of Restricted Stock	  	10
	 7.2
	  	Restricted Stock Agreement	  	10
	 7.3
	  	Transferability	  	10
	 7.4
	  	Other Restrictions	  	11
	 7.5
	  	Removal of Restrictions	  	11
	 7.6
	  	Voting Rights	  	11
	 7.7
	  	Dividends and Other Distributions	  	11
	 7.8
	  	Return of Restricted Stock to Company	  	12
		
	 SECTION 8 PERFORMANCE UNITS AND PERFORMANCE SHARES
	  	12
			
	 8.1
	  	Grant of Performance Units/Shares	  	12
	 8.2
	  	Value of Performance Units/Shares	  	12
	 8.3
	  	Performance Objectives and Other Terms	  	12
	 8.4
	  	Earning of Performance Units/Shares	  	12
	 8.5
	  	Form and Timing of Payment of Performance Units/Shares	  	13
	 8.6
	  	Cancellation of Performance Units/Shares	  	13
		
	 SECTION 9 NONEMPLOYEE DIRECTOR OPTIONS
	  	13
			
	 9.1
	  	Granting of Options	  	13
	 9.2
	  	Terms of Options	  	13
		
	 SECTION 10 MISCELLANEOUS
	  	14
			
	 10.1
	  	Deferrals	  	14
	 10.2
	  	No Effect on Employment or Service	  	14
	 10.3
	  	Participation	  	14
	 10.4
	  	Indemnification	  	14
	 10.5
	  	Successors	  	15
	 10.6
	  	Beneficiary Designations	  	15
	 10.7
	  	Limited Transferability of Awards	  	15
	 10.8
	  	No Rights as Stockholder	  	15
		
	 SECTION 11 AMENDMENT, TERMINATION, AND DURATION
	  	16
			
	 11.1
	  	Amendment, Suspension, or Termination	  	16
	 11.2
	  	Duration of the Plan	  	16
		
	 SECTION 12 TAX WITHHOLDING
	  	16
			
	 12.1
	  	Withholding Requirements	  	16
	 12.2
	  	Withholding Arrangements	  	16
		
	 SECTION 13 LEGAL CONSTRUCTION
	  	16
			
	 13.1
	  	Gender and Number	  	16
	 13.2
	  	Severability	  	16
	 13.3
	  	Requirements of Law	  	17
	 13.4
	  	Securities Law Compliance	  	17

  

 iii 

 TABLE OF CONTENTS 
 (continued) 
  

	 	  	 	  	Page

	 13.5
	  	Governing Law	  	17
	 13.6
	  	Captions	  	17
		
	 EXECUTION
	  	19

  
  

 iv 

 PALMSOURCE, INC. 
 2003 EQUITY INCENTIVE PLAN 
  
 PALMSOURCE, INC., hereby establishes the PalmSource, Inc. 2003 Equity Incentive Plan, effective as of
                                    , 2003. 
  
 SECTION 1 
 BACKGROUND AND PURPOSE 
  
 1.1 Background. The Plan permits the grant of Nonqualified Stock Options, Incentive Stock Options, SARs, Restricted Stock, Performance Units, and Performance Shares. 
  
 1.2 Purpose of the Plan. The Plan is intended to attract, motivate,
and retain (a) employees of the Company and its Affiliates, (b) consultants who provide significant services to the Company and its Affiliates, and (c) directors of the Company who are employees of neither the Company nor any Affiliate. The Plan
also is designed to encourage stock ownership by Participants, thereby aligning their interests with those of the Company’s shareholders. 
  
 SECTION 2 
 DEFINITIONS 
  
 The following words and phrases shall have the following meanings unless a
different meaning is plainly required by the context: 
  
 2.1
“1934 Act” means the Securities Exchange Act of 1934, as amended. Reference to a specific section of the 1934 Act or regulation thereunder shall include such section or regulation, any valid regulation promulgated under such
section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation. 
  
 2.2 “Affiliate” means any corporation or any other entity (including, but not limited to, partnerships and joint ventures) controlling,
controlled by, or under common control with the Company. 
  
 2.3
“Affiliated SAR” means an SAR that is granted in connection with a related Option, and which automatically will be deemed to be exercised at the same time that the related Option is exercised. 
  
 2.4 “Annual Revenue” means the Company’s or a business
unit’s net sales for the Fiscal Year, determined in accordance with generally accepted accounting principles; provided, however, that prior to the Fiscal Year, the Committee shall determine whether any significant item(s) shall be excluded or
included from the calculation of Annual Revenue with respect to one or more Participants. 
  
 2.5 “Award” means, individually or collectively, a grant under the Plan of Nonqualified Stock Options, Incentive Stock Options, SARs, Restricted Stock, Performance Units, or Performance Shares.

  

 2.6 “Award Agreement” means the written agreement setting forth the terms and provisions
applicable to each Award granted under the Plan. 
  
 2.7
“Board” or “Board of Directors” means the Board of Directors of the Company. 
  
 2.8 “Cash Position” means the Company’s level of cash and cash equivalents. 
  
 2.9 “Code” means the Internal Revenue Code of 1986, as
amended. Reference to a specific section of the Code or regulation thereunder shall include such section or regulation, any valid regulation promulgated under such section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such section or regulation. 
  
 2.10 “Committee” means the Board or a committee appointed by the Board (pursuant to Section 3.1) to administer the Plan. 
  
 2.11 “Company” means PalmSource, Inc., a Delaware corporation, or any successor thereto. With respect to the definitions of the
Performance Goals, the Committee may determine that “Company” means PalmSource, Inc. and its consolidated subsidiaries. 
  
 2.12 “Consultant” means any consultant, independent contractor, or other person who provides significant services to the Company or its
Affiliates, but who is neither an Employee nor a Director. 
  
 2.13 “Director” means any individual who is a member of the Board of Directors of the Company. 
  
 2.14 “Disability” means a permanent and total disability within the meaning of Section 22(e)(3) of the Code, provided that in the case of
Awards other than Incentive Stock Options, the Committee in its discretion may determine whether a permanent and total disability exists in accordance with uniform and non-discriminatory standards adopted by the Committee from time to time.

  
 2.15 “Earnings Per Share” means as to any
Fiscal Year, the Company’s or a business unit’s Net Income, divided by a weighted average number of common shares outstanding and dilutive common equivalent shares deemed outstanding, determined in accordance with generally accepted
accounting principles. 
  
 2.16 “Employee” means
any employee of the Company or of an Affiliate, whether such employee is so employed at the time the Plan is adopted or becomes so employed subsequent to the adoption of the Plan. 
  
 2.17 “Exchange Program” means a program under which (a) outstanding Awards are surrendered or cancelled in
exchange for Awards of the same type (which may have lower Exercise Prices or purchase prices), Awards of a different type, and/or cash, (b) the Exercise Price of an outstanding Option is reduced, and/or (c) the Exercise Price of an outstanding SAR
is reduced. The terms and conditions of any Exchange Program shall be determined by the Committee in its sole discretion. 
  

 2 

 2.18 “Exercise Price” means the price at which a Share may be purchased by a Participant
pursuant to the exercise of an Option. 
  
 2.19 “Fair
Market Value” means the last quoted per share selling price for Shares on the relevant date, or if there were no sales on such date, the arithmetic mean of the highest and lowest quoted selling prices on the nearest day before and the
nearest day after the relevant date, as determined by the Committee. Notwithstanding the preceding, for federal, state, and local income tax reporting purposes, fair market value shall be determined by the Committee (or its delegate) in accordance
with uniform and nondiscriminatory standards adopted by it from time to time. 
  
 2.20 “Fiscal Year” means the fiscal year of the Company. 
  
 2.21 “Freestanding SAR” means a SAR that is granted independently of any Option. 
  
 2.22 “Grant Date” means, with respect to an Award, the date
that the Award was granted. 
  
 2.23 “Incentive Stock
Option” means an Option to purchase Shares which is designated as an Incentive Stock Option and is intended to meet the requirements of Section 422 of the Code. 
  
 2.24 “Individual Objectives” means as to a Participant, the objective and measurable goals set by a
“management by objectives” process and approved by the Committee (in its discretion). 
  
 2.25 “Net Income” means as to any Fiscal Year, the income after taxes of the Company for the Fiscal Year determined in accordance with
generally accepted accounting principles, provided that prior to the Fiscal Year, the Committee shall determine whether any significant item(s) shall be included or excluded from the calculation of Net Income with respect to one or more
Participants. 
  
 2.26 “Nonemployee Director”
means a Director who is an employee of neither the Company nor of any Affiliate. 
  
 2.27 “Nonqualified Stock Option” means an option to purchase Shares which is not intended to be an Incentive Stock Option. 
  
 2.28 “Operating Cash Flow” means the Company’s or a business unit’s sum of Net Income plus
depreciation and amortization less capital expenditures plus changes in working capital comprised of accounts receivable, inventories, other current assets, trade accounts payable, accrued expenses, product warranty, advance payments from customers
and long-term accrued expenses, determined in accordance with generally acceptable accounting principles. 
  
 2.29 “Operating Income” means the Company’s or a business unit’s income from operations but excluding any unusual items,
determined in accordance with generally accepted accounting principles. 
  
 2.30 “Option” means an Incentive Stock Option or a Nonqualified Stock Option. 
  
 2.31 “Participant” means an Employee, Consultant, or Nonemployee Director who has an outstanding Award. 
  

 3 

 2.32 “Performance Goals” means the goal(s) (or combined goal(s)) determined by the
Committee (in its discretion) to be applicable to a Participant with respect to an Award. As determined by the Committee, the Performance Goals applicable to an Award may provide for a targeted level or levels of achievement using one or more of the
following measures: (a) Annual Revenue, (b) Cash Position, (c) Earnings Per Share, (d) Individual Objectives, (e) Net Income, (f) Operating Cash Flow, (g) Operating Income, (h) Return on Assets, (i) Return on Equity, (j) Return on Sales, and (k)
Total Shareholder Return. The Performance Goals may differ from Participant to Participant and from Award to Award. 
  
 2.33 “Performance Share” means an Award granted to a Participant pursuant to Section 8. 
  
 2.34 “Performance Unit” means an Award granted to a
Participant pursuant to Section 8. 
  
 2.35 “Period of
Restriction” means the period during which the transfer of Shares of Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial risk of forfeiture. As provided in Section 7, such restrictions may be
based on the passage of time, the achievement of target levels of performance, or the occurrence of other events as determined by the Committee, in its discretion. 
  
 2.36 “Plan” means the PalmSource, Inc. 2003 Equity Incentive Plan, as set forth in this instrument and as
hereafter amended from time to time. 
  
 2.37
“Registration Date” means the effective date of the first registration statement which is filed by the Company and declared effective pursuant to Section 12(g) of the 1934 Act, with respect to any class of the Company’s
securities. 
  
 2.38 “Restricted Stock” means an
Award granted to a Participant pursuant to Section 7. 
  
 2.39
“Return on Assets” means the percentage equal to the Company’s or a business unit’s Operating Income before incentive compensation, divided by average net Company or business unit, as applicable, assets, determined in
accordance with generally accepted accounting principles. 
  
 2.40
“Return on Equity” means the percentage equal to the Company’s Net Income divided by average stockholder’s equity, determined in accordance with generally accepted accounting principles. 
  
 2.41 “Return on Sales” means the percentage equal to the
Company’s or a business unit’s Operating Income before incentive compensation, divided by the Company’s or the business unit’s, as applicable, revenue, determined in accordance with generally accepted accounting principles.

  
 2.42 “Rule 16b-3” means Rule 16b-3
promulgated under the 1934 Act, and any future regulation amending, supplementing or superseding such regulation. 
  
 2.43 “Section 16 Person” means a person who, with respect to the Shares, is subject to Section 16 of the 1934 Act. 
  
 2.44 “Shares” means the shares of common stock of the
Company. 
  

 4 

 2.45 “Stock Appreciation Right” or “SAR” means an Award, granted alone
or in connection with a related Option, that pursuant to Section 6 is designated as an SAR. 
  
 2.46 “Subsidiary” means any corporation in an unbroken chain of corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken chain then owns
stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 
  
 2.47 “Tandem SAR” means an SAR that is granted in connection with a related Option, the exercise of which shall require forfeiture of the
right to purchase an equal number of Shares under the related Option (and when a Share is purchased under the Option, the SAR shall be canceled to the same extent). 
  
 2.48 “Termination of Service” means (a) in the case of an Employee, a cessation of the employee-employer
relationship between the Employee and the Company or an Affiliate for any reason, including, but not by way of limitation, a termination by resignation, discharge, death, Disability or the disaffiliation of an Affiliate, but excluding any such
termination where there is a simultaneous reemployment by the Company or an Affiliate; (b) in the case of a Consultant, a cessation of the service relationship between the Consultant and the Company or an Affiliate for any reason, including, but not
by way of limitation, a termination by resignation, discharge, death, Disability, or the disaffiliation of an Affiliate, but excluding any such termination where there is a simultaneous re-engagement of the consultant by the Company or an Affiliate;
and (c) in the case of a Nonemployee Director, a cessation of the Director’s service on the Board for any reason, including, but not by way of limitation, a termination by resignation, death, Disability or non-reelection to the Board.

  
 2.49 “Total Shareholder Return” means the
total return (change in share price plus reinvestment of any dividends) of a Share. 
  
 SECTION 3 
 ADMINISTRATION 
  
 3.1 The Committee. The Plan shall be administered by the Committee. If the Committee is not the Board then the
Committee shall consist of not less than two (2) Directors who shall be appointed from time to time by, and shall serve at the pleasure of, the Board of Directors. If the Committee is not the Board then the Committee shall be comprised solely of
Directors who both are (a) “non-employee directors” under Rule 16b-3, and (b) ”outside directors” under Section 162(m) of the Code. 
  
 3.2 Authority of the Committee. It shall be the duty of the Committee to administer the Plan in accordance with the Plan’s provisions. The
Committee shall have all powers and discretion necessary or appropriate to administer the Plan and to control its operation, including, but not limited to, the power to (a) determine which Employees, Consultants and Directors shall be granted
Awards, (b) prescribe the terms and conditions of the Awards, (c) interpret the Plan and the Awards, (d) adopt such procedures and subplans as are necessary or appropriate to permit participation in the Plan by Employees and Directors who are
foreign nationals or employed outside of the United States, (e) adopt rules for the administration, interpretation and application of the Plan as are consistent 
  

 5 

 therewith, (f) effect, at any time and from time to time, an Exchange Program, and (g) interpret, amend or revoke any
such rules. 
  
 3.3 Delegation by the Committee. The
Committee, in its sole discretion and on such terms and conditions as it may provide, may delegate all or any part of its authority and powers under the Plan to one or more Directors or officers of the Company; provided, however, that the Committee
may not delegate its authority and powers (a) with respect to Section 16 Persons, or (b) in any way which would jeopardize the Plan’s qualification under Section 162(m) of the Code or Rule 16b-3. 
  
 3.4 Decisions Binding. All determinations and decisions made by the
Committee, the Board, and any delegate of the Committee pursuant to the provisions of the Plan shall be final, conclusive, and binding on all persons, and shall be given the maximum deference permitted by law. 
  
 SECTION 4 
 SHARES SUBJECT TO THE PLAN 
  
 4.1 Number of Shares. Subject to adjustment as provided in Section 4.3, the total number of Shares available for grant under the Plan shall not exceed 3,626,294 Shares, plus an annual increase to be added on
January 1st of each year beginning in the 2005 calendar year, equal to the lesser of (a) 1,000,000 Shares, (b) 5% of
the outstanding Shares on the immediately preceding date, or (c) an amount determined by the Board. The 3,626,294 Shares available for grant under the Plan shall include (x) Shares which have been reserved but not granted under the Company’s
2001 Stock Plan (the “2001 Plan”), as of the Registration Date, plus (y) Shares returned to the 2001 Plan as a result of termination of options or the repurchases of unvested Shares issued under the 2001 Plan, on or after the Registration
Date. Shares granted under the Plan may be either authorized but unissued Shares or treasury Shares. 
  
 4.2 Lapsed Awards. If an Award is settled in cash, or is cancelled, terminates, expires, or lapses for any reason (with the exception of the
termination of a Tandem SAR upon exercise of the related Option, or the termination of a related Option upon exercise of the corresponding Tandem SAR), any Shares subject to such Award again shall be available to be the subject of an Award.

  
 4.3 Adjustments in Awards and Authorized Shares. In the
event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs such that an adjustment is determined by the Committee (in its sole discretion) to be
appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust the number and class of Shares
which may be delivered under the Plan, the number and class of Shares which may be added annually to the Shares reserved under the Plan, the number, class, and price of Shares subject to outstanding Awards, and the numerical limits of Sections 5.1,
6.1, 7.1, 8.1 and 9.1. Notwithstanding the preceding, the number of Shares subject to any Award always shall be a whole number. 
  

 6 

 SECTION 5 
 STOCK OPTIONS 
  
 5.1 Grant of
Options. Subject to the terms and provisions of the Plan, Options may be granted to Employees, Consultants and Directors at any time and from time to time as determined by the Committee in its sole discretion. The Committee, in its sole
discretion, shall determine the number of Shares subject to each Option, provided that during any Fiscal Year, no Participant shall be granted Options covering more than 600,000 Shares. Notwithstanding the foregoing limitation, in connection with a
Participant’s initial service as an Employee, an Employee may be granted Options to purchase up to an additional 200,000 Shares. The Committee may grant Incentive Stock Options, Nonqualified Stock Options, or a combination thereof. 

 
 5.2 Award Agreement. Each Option shall be evidenced by an Award
Agreement that shall specify the Exercise Price, the expiration date of the Option, the number of Shares to which the Option pertains, any conditions to exercise the Option, and such other terms and conditions as the Committee, in its discretion,
shall determine. The Award Agreement shall also specify whether the Option is intended to be an Incentive Stock Option or a Nonqualified Stock Option. 
  
 5.3 Exercise Price. Subject to the provisions of this Section 5.3, the Exercise Price for each Option shall be determined by the Committee in its
sole discretion. 
  
 5.3.1 Nonqualified Stock Options. In
the case of a Nonqualified Stock Option intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code, the Exercise Price shall be not less than one hundred percent (100%) of the Fair Market Value
of a Share on the Grant Date. 
  
 5.3.2 Incentive Stock
Options. In the case of an Incentive Stock Option, the Exercise Price shall be not less than one hundred percent (100%) of the Fair Market Value of a Share on the Grant Date; provided, however, that if on the Grant Date, the Employee (together
with persons whose stock ownership is attributed to the Employee pursuant to Section 424(d) of the Code) owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any of its Subsidiaries, the
Exercise Price shall be not less than one hundred and ten percent (110%) of the Fair Market Value of a Share on the Grant Date. 
  
 5.3.3 Substitute Options. Notwithstanding the provisions of Sections 5.3.1 and 5.3.2, in the event that the Company or an Affiliate consummates a
transaction described in Section 424(a) of the Code (e.g., the acquisition of property or stock from an unrelated corporation), persons who become Employees, Directors or Consultants on account of such transaction may be granted Options in
substitution for options granted by their former employer. If such substitute Options are granted, the Committee, in its sole discretion and consistent with Section 424(a) of the Code, may determine that such substitute Options shall have an
exercise price less than one hundred percent (100%) of the Fair Market Value of the Shares on the Grant Date. 
  
 5.4 Expiration of Options 
  
 5.4.1 Expiration Dates. Each Option shall terminate no later than the first to occur of the following events: 
  

 7 

 (a) The date for termination of the Option set forth in the written Award Agreement, or 
  
 (b) If no date for the termination of the Option is set forth in the written
Award Agreement (other than reference to Section 5.4.1(c)), the expiration of three (3) months from the date of the Participant’s Termination of Service for any reason; or 
  
 (c) The expiration of ten (10) years from the Grant Date. 
  
 5.4.2 Committee Discretion. Subject to the limits of Section 5.4.1, the Committee, in its sole discretion, (a) shall
provide in each Award Agreement when each Option expires and becomes unexercisable, and (b) may, after an Option is granted, extend the maximum term of the Option (subject to Section 5.8.4 regarding Incentive Stock Options). 
  
 5.5 Exercisability of Options. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as the Committee shall determine in its sole discretion. After an Option is granted, the Committee, in its sole discretion, may accelerate the exercisability of the Option.

  
 5.6 Payment. Options shall be exercised by the
Participant’s delivery of a written notice of exercise to the Secretary of the Company (or its designee), setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for the Shares.

  
 Upon the exercise of any Option, the Exercise Price shall be
payable to the Company in full in cash or its equivalent. The Committee, in its sole discretion, also may permit exercise (a) by tendering previously acquired Shares having an aggregate Fair Market Value at the time of exercise equal to the total
Exercise Price, or (b) by any other means which the Committee, in its sole discretion, determines to both provide legal consideration for the Shares, and to be consistent with the purposes of the Plan. 
  
 As soon as practicable after receipt of a written notification of exercise
and full payment for the Shares purchased, the Company shall deliver to the Participant (or the Participant’s designated broker), Share certificates (which may be in book entry form) representing such Shares. 
  
 5.7 Restrictions on Share Transferability. The Committee may impose
such restrictions on any Shares acquired pursuant to the exercise of an Option as it may deem advisable, including, but not limited to, restrictions related to applicable federal securities laws, the requirements of any national securities exchange
or system upon which Shares are then listed or traded, or any blue sky or state securities laws. 
  
 5.8 Certain Additional Provisions for Incentive Stock Options 
  
 5.8.1 Exercisability. The aggregate Fair Market Value (determined on the Grant Date(s)) of the Shares with respect to
which Incentive Stock Options are exercisable for the first time by any Employee during any calendar year (under all plans of the Company and its Subsidiaries) shall not exceed $100,000. 
  

 8 

 5.8.2 Termination of Service. No Incentive Stock Option may be exercised more than three (3)
months after the Participant’s Termination of Service for any reason other than Disability or death, unless (a) the Participant dies during such three-month period, and/or (b) the Award Agreement or the Committee permits later exercise. No
Incentive Stock Option may be exercised more than one (1) year after the Participant’s Termination of Service on account of death or Disability, unless the Award Agreement or the Committee permit later exercise. 
  
 5.8.3 Company and Subsidiaries Only. Incentive Stock Options may be
granted only to persons who are employees of the Company or a Subsidiary on the Grant Date. 
  
 5.8.4 Expiration. No Incentive Stock Option may be exercised after the expiration of ten (10) years from the Grant Date; provided, however, that if the Option is granted to an Employee who, together with
persons whose stock ownership is attributed to the Employee pursuant to Section 424(d) of the Code, owns stock possessing more than 10% of the total combined voting power of all classes of the stock of the Company or any of its Subsidiaries, the
Option may not be exercised after the expiration of five (5) years from the Grant Date. 
  
 SECTION 6 
 STOCK APPRECIATION RIGHTS 
  
 6.1 Grant of SARs. Subject to the terms and conditions of the Plan, an SAR may be granted to Employees, Directors and
Consultants at any time and from time to time as shall be determined by the Committee, in its sole discretion. The Committee may grant Affiliated SARs, Freestanding SARs, Tandem SARs, or any combination thereof. 
  
 6.1.1 Number of Shares. The Committee shall have complete discretion
to determine the number of SARs granted to any Participant, provided that during any Fiscal Year, no Participant shall be granted SARs covering more than 200,000 Shares. 
  
 6.1.2 Exercise Price and Other Terms. The Committee, subject to the provisions of the Plan, shall have complete
discretion to determine the terms and conditions of SARs granted under the Plan. However, the exercise price of a Freestanding SAR shall be not less than one hundred percent (100%) of the Fair Market Value of a Share on the Grant Date. The exercise
price of Tandem or Affiliated SARs shall equal the Exercise Price of the related Option. 
  
 6.2 Exercise of Tandem SARs. Tandem SARs may be exercised for all or part of the Shares subject to the related Option upon the surrender of the right to exercise the equivalent portion of the related Option. A
Tandem SAR may be exercised only with respect to the Shares for which its related Option is then exercisable. With respect to a Tandem SAR granted in connection with an Incentive Stock Option: (a) the Tandem SAR shall expire no later than the
expiration of the underlying Incentive Stock Option; (b) the value of the payout with respect to the Tandem SAR shall be for no more than one hundred percent (100%) of the difference between the Exercise Price of the underlying Incentive Stock
Option and the Fair Market Value of the Shares subject to the underlying Incentive Stock Option at the time the Tandem SAR is exercised; and (c) the Tandem SAR shall be exercisable only when the Fair Market Value of the Shares subject to the
Incentive Stock Option exceeds the Exercise Price of the Incentive Stock Option. 
  

 9 

 6.3 Exercise of Affiliated SARs. An Affiliated SAR shall be deemed to be exercised upon the
exercise of the related Option. The deemed exercise of an Affiliated SAR shall not necessitate a reduction in the number of Shares subject to the related Option. 
  
 6.4 Exercise of Freestanding SARs. Freestanding SARs shall be exercisable on such terms and conditions as the
Committee, in its sole discretion, shall determine. 
  
 6.5 SAR
Agreement. Each SAR grant shall be evidenced by an Award Agreement that shall specify the exercise price, the term of the SAR, the conditions of exercise, and such other terms and conditions as the Committee, in its sole discretion, shall
determine. 
  
 6.6 Expiration of SARs. An SAR granted under
the Plan shall expire upon the date determined by the Committee, in its sole discretion, and set forth in the Award Agreement. Notwithstanding the foregoing, the rules of Section 5.4 also shall apply to SARs. 
  
 6.7 Payment of SAR Amount. Upon exercise of an SAR, a Participant
shall be entitled to receive payment from the Company in an amount determined by multiplying: 
  
 (a) The difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times 
  
 (b) The number of Shares with respect to which the SAR is exercised. 
  
 At the discretion of the Committee, the payment upon SAR exercise may be in cash, in Shares of equivalent value, or in some
combination thereof. 
  
 SECTION 7 
 RESTRICTED STOCK 
  
 7.1 Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the Committee, at any time and from time to time, may grant Shares
of Restricted Stock to Employees, Directors and Consultants in such amounts as the Committee, in its sole discretion, shall determine. The Committee, in its sole discretion, shall determine the number of Shares to be granted to each Participant,
provided that during any Fiscal Year, no Participant shall receive more than 600,000 Shares of Restricted Stock. 
  
 7.2 Restricted Stock Agreement. Each Award of Restricted Stock shall be evidenced by an Award Agreement that shall specify the Period of
Restriction, the number of Shares granted, and such other terms and conditions as the Committee, in its sole discretion, shall determine. Unless the Committee determines otherwise, Shares of Restricted Stock shall be held by the Company as escrow
agent until the restrictions on such Shares have lapsed. 
  
 7.3
Transferability. Except as provided in this Section 7, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction. 
  

 10 

 7.4 Other Restrictions. The Committee, in its sole discretion, may impose such other restrictions
on Shares of Restricted Stock as it may deem advisable or appropriate, in accordance with this Section 7.4. 
  
 7.4.1 General Restrictions. The Committee may set restrictions based upon the achievement of specific performance objectives (Company-wide,
divisional, or individual), applicable federal or state securities laws, or any other basis determined by the Committee in its discretion. 
  
 7.4.2 Section 162(m) Performance Restrictions. For purposes of qualifying grants of Restricted Stock as “performance-based compensation”
under Section 162(m) of the Code, the Committee, in its discretion, may set restrictions based upon the achievement of Performance Goals. The Performance Goals shall be set by the Committee on or before the latest date permissible to enable the
Restricted Stock to qualify as “performance-based compensation” under Section 162(m) of the Code. In granting Restricted Stock which is intended to qualify under Section 162(m) of the Code, the Committee shall follow any procedures
determined by it from time to time to be necessary or appropriate to ensure qualification of the Restricted Stock under Section 162(m) of the Code (e.g., in determining the Performance Goals). 
  
 7.4.3 Legend on Certificates. The Committee, in its discretion, may
legend the certificates representing Restricted Stock to give appropriate notice of such restrictions. For example, the Committee may determine that some or all certificates representing Shares of Restricted Stock shall bear the following legend:

  
 “The sale or other transfer of the shares
of stock represented by this certificate, whether voluntary, involuntary, or by operation of law, is subject to certain restrictions on transfer as set forth in the PalmSource, Inc. 2003 Equity Incentive Plan, and in a Restricted Stock Agreement. A
copy of the Plan and such Restricted Stock Agreement may be obtained from the Secretary of PalmSource, Inc.” 
  
 7.5 Removal of Restrictions. Except as otherwise provided in this Section 7, Shares of Restricted Stock covered by each Restricted Stock grant made
under the Plan shall be released from escrow as soon as practicable after the last day of the Period of Restriction. The Committee, in its discretion, may accelerate the time at which any restrictions shall lapse or be removed. After the
restrictions have lapsed, the Participant shall be entitled to have any legend or legends under Section 7.4.3 removed from his or her Share certificate, and the Shares shall be freely transferable by the Participant. 
  
 7.6 Voting Rights. During the Period of Restriction, Participants
holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares, unless the Committee determines otherwise. 
  
 7.7 Dividends and Other Distributions. During the Period of Restriction, Participants holding Shares of Restricted Stock shall be entitled to
receive all dividends and other distributions paid with respect to such Shares unless otherwise provided in the Award Agreement. If any such dividends or distributions are paid in Shares, the Shares shall be subject to the same restrictions on
transferability and forfeitability as the Shares of Restricted Stock with respect to which they were paid. 
  

 11 

 7.8 Return of Restricted Stock to Company. On the date set forth in the Award Agreement, the
Restricted Stock for which restrictions have not lapsed shall revert to the Company and again shall become available for grant under the Plan. 
  
 SECTION 8 
 PERFORMANCE UNITS AND PERFORMANCE
SHARES 
  
 8.1 Grant of Performance Units/Shares.
Performance Units and Performance Shares may be granted to Employees, Directors and Consultants at any time and from time to time, as shall be determined by the Committee, in its sole discretion. The Committee shall have complete discretion in
determining the number of Performance Units and Performance Shares granted to each Participant provided that during any Fiscal Year, (a) no Participant shall receive Performance Units having an initial value greater than $1,000,000, and (b) no
Participant shall receive more than 200,000 Performance Shares. 
  
 8.2 Value of Performance Units/Shares. Each Performance Unit shall have an initial value that is established by the Committee on or before the Grant Date. Each Performance Share shall have an initial value equal to the Fair Market
Value of a Share on the Grant Date. 
  
 8.3 Performance
Objectives and Other Terms. The Committee shall set performance objectives in its discretion which, depending on the extent to which they are met, will determine the number or value of Performance Units/Shares that will be paid out to the
Participants. The time period during which the performance objectives must be met shall be called the “Performance Period.” Each Award of Performance Units/Shares shall be evidenced by an Award Agreement that shall specify the Performance
Period, and such other terms and conditions as the Committee, in its sole discretion, shall determine. 
  
 8.3.1 General Performance Objectives. The Committee may set performance objectives based upon the achievement of Company-wide, divisional, or
individual goals, applicable federal or state securities laws, or any other basis determined by the Committee in its discretion. 
  
 8.3.2 Section 162(m) Performance Objectives. For purposes of qualifying grants of Performance Units/Shares as “performance-based
compensation” under Section 162(m) of the Code, the Committee, in its discretion, may determine that the performance objectives applicable to Performance Units/Shares shall be based on the achievement of Performance Goals. The Performance Goals
shall be set by the Committee on or before the latest date permissible to enable the Performance Units/Shares to qualify as “performance-based compensation” under Section 162(m) of the Code. In granting Performance Units/Shares which are
intended to qualify under Section 162(m) of the Code, the Committee shall follow any procedures determined by it from time to time to be necessary or appropriate to ensure qualification of the Performance Units/Shares under Section 162(m) of the
Code (e.g., in determining the Performance Goals). 
  
 8.4
Earning of Performance Units/Shares. After the applicable Performance Period has ended, the holder of Performance Units/Shares shall be entitled to receive a payout of the number of Performance Units/Shares earned by the Participant over the
Performance Period, to be determined as a function of the extent to which the corresponding performance objectives have been achieved. 
  

 12 

 After the grant of a Performance Unit/Share, the Committee, in its sole discretion, may reduce or waive
any performance objectives for such Performance Unit/Share. 
  
 8.5 Form and Timing of Payment of Performance Units/Shares. Payment of earned Performance Units/Shares shall be made as soon as practicable after the expiration of the applicable Performance Period. The Committee, in its sole
discretion, may pay earned Performance Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the value of the earned Performance Units/Shares at the close of the applicable Performance Period) or in a
combination thereof. 
  
 8.6 Cancellation of Performance
Units/Shares. On the date set forth in the Award Agreement, all unearned or unvested Performance Units/Shares shall be forfeited to the Company, and again shall be available for grant under the Plan. 
  
 SECTION 9 
 NONEMPLOYEE DIRECTOR OPTIONS 
  
 9.1 Granting of Options. 
  
 9.1.1 Initial Grants. Each Nonemployee Director who first becomes a Nonemployee Director on or after the effective date of this Plan, automatically shall receive, as of the date that the individual first is appointed or elected as a
Nonemployee Director, an Option to purchase 20,000 Shares. 
  
 9.1.2 Ongoing Grants. Beginning in the 2004 Fiscal Year, each Nonemployee Director who both (a) is a Nonemployee Director on the last business day of a Fiscal Year, and (b) has served as a Nonemployee Director for the entire Fiscal
Year which includes such last business day, automatically shall receive, as of such last business day only, an Option to purchase 10,000 Shares. 
  
 9.2 Terms of Options. 
  
 9.2.1 Option Agreement. Each Option granted pursuant to this Section 9 shall be evidenced by a written Award Agreement between the Participant and
the Company. 
  
 9.2.2 Exercise Price. The Exercise Price
for the Shares subject to each Option granted pursuant to this Section 9 shall be 100% of the Fair Market Value of such Shares on the Grant Date. 
  
 9.2.3 Exercisability. 
  
 (a) Each Option granted pursuant to Section 9.1.1 shall become exercisable as to twenty-five percent (25%) of the Shares on the first anniversary of the
Grant Date, and as to an additional twenty-five percent (25%) of the Shares on each succeeding anniversary until 100% of the Shares subject to such Option have become exercisable. 
  
 (b) Each Option granted pursuant to Section 9.1.2 shall become exercisable as to one-hundred percent (100%) of the Shares
on the first anniversary of the Grant Date. 
  

 13 

 Notwithstanding the preceding, once a Participant ceases to be a Director, his or her Options which are not then
exercisable shall never become exercisable and shall be immediately forfeited, except to the limited extent provided in Section 9.2.5. 
  
 9.2.4 Expiration of Options. Each Option granted pursuant to this Section 9 shall terminate upon the first to occur of the following events:

  
 (a) The expiration of ten (10) years from the Grant Date; or

  
 (b) The expiration of three (3) months from the date of the
Participant’s Termination of Service for any reason other than the Participant’s death or Disability; or 
  
 (c) The expiration of one (1) year from the date of the Participant’s Termination of Service by reason of Disability. 
  
 9.2.5 Death of Participant. Notwithstanding the provisions of Section
9.2.4, if a Participant dies prior to the expiration of his or her Options in accordance with Section 9.2.4, then (a) one hundred percent (100%) of the Shares covered by his or her Options shall immediately become one hundred percent (100%)
exercisable, and (b) his or her Options shall terminate one (1) year after the date of his or her death. 
  
 9.2.6 Not Incentive Stock Options. Options granted pursuant to this Section 9 shall not be designated as Incentive Stock Options. 
  
 9.2.7 Other Terms. All provisions of the Plan not inconsistent with
this Section 9 shall apply to Options granted to Nonemployee Directors pursuant to this Section 9. 
  
 SECTION 10 
 MISCELLANEOUS 
  
 10.1 Deferrals. The Committee, in its sole discretion, may permit a Participant to defer receipt of the payment of
cash or the delivery of Shares that would otherwise be due to such Participant under an Award. Any such deferral elections shall be subject to such rules and procedures as shall be determined by the Committee in its sole discretion. 
  
 10.2 No Effect on Employment or Service. Nothing in the Plan shall
interfere with or limit in any way the right of the Company to terminate any Participant’s employment or service at any time, with or without cause. For purposes of the Plan, transfer of employment of a Participant between the Company and any
one of its Affiliates (or between Affiliates) shall not be deemed a Termination of Service. Employment with the Company and its Affiliates is on an at-will basis only. 
  
 10.3 Participation. No Employee shall have the right to be selected to receive an Award under this Plan, or, having
been so selected, to be selected to receive a future Award. 
  
 10.4 Indemnification. Each person who is or shall have been a member of the Committee, or of the Board, shall be indemnified and held harmless by the Company against and from (a) any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a 
  

 14 

 party or in which he or she may be involved by reason of any action taken or failure to act under the Plan or any Award
Agreement, and (b) from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such claim, action, suit, or proceeding against him or her, provided
he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any
other rights of indemnification to which such persons may be entitled under the Company’s Certificate of Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or under any power that the Company may have to indemnify them or
hold them harmless. 
  
 10.5 Successors. All obligations of
the Company under the Plan, with respect to Awards granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of
all or substantially all of the business or assets of the Company. 
  
 10.6 Beneficiary Designations. If permitted by the Committee, a Participant under the Plan may name a beneficiary or beneficiaries to whom any vested but unpaid Award shall be paid in the event of the Participant’s death. Each
such designation shall revoke all prior designations by the Participant and shall be effective only if given in a form and manner acceptable to the Committee. In the absence of any such designation, any vested benefits remaining unpaid at the
Participant’s death shall be paid to the Participant’s estate and, subject to the terms of the Plan and of the applicable Award Agreement, any unexercised vested Award may be exercised by the administrator or executor of the
Participant’s estate. 
  
 10.7 Limited Transferability of
Awards. No Award granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will, by the laws of descent and distribution, or to the limited extent provided in Section 10.6. All
rights with respect to an Award granted to a Participant shall be available during his or her lifetime only to the Participant. Notwithstanding the foregoing, the Participant may, in a manner specified by the Committee, (a) transfer a Nonqualified
Stock Option to a Participant’s spouse, former spouse or dependent pursuant to a court-approved domestic relations order which relates to the provision of child support, alimony payments or marital property rights, and (b) transfer a
Nonqualified Stock Option by bona fide gift and not for any consideration, to (i) a member or members of the Participant’s immediate family, (ii) a trust established for the exclusive benefit of the Participant and/or member(s) of the
Participant’s immediate family, (iii) a partnership, limited liability company of other entity whose only partners or members are the Participant and/or member(s) of the Participant’s immediate family, or (iv) a foundation in which the
Participant an/or member(s) of the Participant’s immediate family control the management of the foundation’s assets. 
  
 10.8 No Rights as Stockholder. Except to the limited extent provided in Sections 7.6 and 7.7, no Participant (nor any beneficiary) shall have any
of the rights or privileges of a stockholder of the Company with respect to any Shares issuable pursuant to an Award (or exercise thereof), unless and until certificates representing such Shares shall have been issued, recorded on the records of the
Company or its transfer agents or registrars, and delivered to the Participant (or beneficiary). 
  

 15 

 SECTION 11 
 AMENDMENT, TERMINATION, AND DURATION 
  
 11.1 Amendment, Suspension, or Termination. The Board or Committee, in its sole discretion, may amend, suspend or terminate the Plan, or any part thereof, at any time and for any reason. The amendment, suspension, or termination of
the Plan shall not, without the consent of the Participant, alter or impair any rights or obligations under any Award theretofore granted to such Participant. No Award may be granted during any period of suspension or after termination of the Plan.

  
 11.2 Duration of the Plan. The Plan shall be effective
as of                 , 2003, and subject to Section 11.1 (regarding the Board’s and the Committee’s right to amend or terminate the Plan), shall remain
in effect until the earlier of July 31, 2013 or ten (10) years following the date the Plan is approved by the stockholders of the Company. 
  
 SECTION 12 
 TAX WITHHOLDING 
  
 12.1 Withholding Requirements. Prior to the delivery of any Shares or
cash pursuant to an Award (or exercise thereof), the Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, and local taxes (including the
Participant’s FICA obligation) required to be withheld with respect to such Award (or exercise thereof). 
  
 12.2 Withholding Arrangements. The Committee, in its sole discretion and pursuant to such procedures as it may specify from time to time, may
permit a Participant to satisfy such tax withholding obligation, in whole or in part by (a) electing to have the Company withhold otherwise deliverable Shares, or (b) delivering to the Company already-owned Shares having a Fair Market Value equal to
the amount required to be withheld. The amount of the withholding requirement shall be deemed to include any amount which the Committee agrees may be withheld at the time the election is made, not to exceed the amount determined by using the maximum
federal, state or local marginal income tax rates applicable to the Participant with respect to the Award on the date that the amount of tax to be withheld is to be determined. The Fair Market Value of the Shares to be withheld or delivered shall be
determined as of the date that the taxes are required to be withheld. 
  
 SECTION 13 
 LEGAL CONSTRUCTION 
  
 13.1 Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural
shall include the singular and the singular shall include the plural. 
  
 13.2 Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included. 
  

 16 

 13.3 Requirements of Law. The granting of Awards and the issuance of Shares under the Plan shall
be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. 
  
 13.4 Securities Law Compliance. With respect to Section 16 Persons, transactions under this Plan are intended to
comply with all applicable conditions of Rule 16b-3. To the extent any provision of the Plan, Award Agreement or action by the Committee fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the
Committee. 
  
 13.5 Governing Law. The Plan and all Award
Agreements shall be construed in accordance with and governed by the laws of the State of California. 
  
 13.6 Captions. Captions are provided herein for convenience only, and shall not serve as a basis for interpretation or construction of the Plan.

  
  

 17Form of Indemnification Agreement

 Exhibit 10.4 
  
 INDEMNIFICATION AGREEMENT 
  
 This Indemnification Agreement (“Agreement”) is entered into as of the
             day of             , 2003 by and between PalmSource, Inc., a Delaware corporation (the
“Company”) and              (“Indemnitee”). 
  
 RECITALS 
  
 A.    The Company and Indemnitee recognize the continued difficulty in obtaining liability insurance for its directors, officers,
employees, agents and fiduciaries, the significant increases in the cost of such insurance and the general reductions in the coverage of such insurance. 
  
 B.    The Company and Indemnitee further recognize the substantial increase in corporate litigation in general, subjecting directors,
officers, employees, agents and fiduciaries to expensive litigation risks at the same time as the availability and coverage of liability insurance has been severely limited. 
  
 C.    Indemnitee does not regard the current protection available as adequate under the present
circumstances, and Indemnitee and other directors, officers, employees, agents and fiduciaries of the Company may not be willing to continue to serve in such capacities without additional protection. 
  
 D.    The Company desires to attract and retain the
services of highly qualified individuals, such as Indemnitee, to serve the Company and, in part, in order to induce Indemnitee to continue to provide services to the Company, wishes to provide for the indemnification and advancing of expenses to
Indemnitee to the maximum extent permitted by law. 
  
 E.    In view of the considerations set forth above, the Company desires that Indemnitee be indemnified by the Company as set forth herein. 
  
 NOW, THEREFORE, the Company and Indemnitee hereby agree as follows: 
  
 1.    Indemnification. 
  
         (a)  Indemnification of Expenses.    The Company shall indemnify Indemnitee to the fullest extent permitted by law if Indemnitee was or is or becomes a
party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, any threatened, pending or completed action, suit, proceeding or alternative dispute resolution mechanism, or any hearing,
inquiry or investigation that Indemnitee in good faith believes might lead to the institution of any such action, suit, proceeding or alternative dispute resolution mechanism, whether civil, criminal, administrative, investigative or other
(hereinafter a “Claim”) by reason of (or arising in part out of) any event or occurrence related to the fact that Indemnitee is or was a director, officer, employee, agent or fiduciary of the Company, or any subsidiary of the
Company, or is or was serving at the 

 
request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other enterprise, or
by reason of any action or inaction on the part of Indemnitee while serving in such capacity (hereinafter an “Indemnifiable Event”) against any and all expenses (including attorneys’ fees and all other costs, expenses and
obligations incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness in or participate in, any such action, suit, proceeding, alternative dispute
resolution mechanism, hearing, inquiry or investigation), judgments, fines, penalties and amounts paid in settlement (if such settlement is approved in advance by the Company, which approval shall not be unreasonably withheld) of such Claim and any
federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement (collectively, hereinafter “Expenses”), including all interest, assessments and other
charges paid or payable in connection with or in respect of such Expenses. Such payment of Expenses shall be made by the Company as soon as practicable but in any event no later than five days after written demand by Indemnitee therefor is presented
to the Company. 
  
         (b)   Reviewing Party.    Notwithstanding the foregoing, (i) the obligations of the Company under Section 1(a) shall be subject to the condition that the
Reviewing Party (as described in Section 10(e) hereof) shall not have determined (in a written opinion, in any case in which the Independent Legal Counsel referred to in Section 1(c) hereof is involved) that Indemnitee would not be permitted to be
indemnified under applicable law, and (ii) the obligation of the Company to make an advance payment of Expenses to Indemnitee pursuant to Section 2(a) (an “Expense Advance”) shall be subject to the condition that, if, when and to
the extent that the Reviewing Party determines that Indemnitee would not be permitted to be so indemnified under applicable law, the Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all such
amounts theretofore paid; provided, however, that if Indemnitee has commenced or thereafter commences legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee should be indemnified under applicable law,
any determination made by the Reviewing Party that Indemnitee would not be permitted to be indemnified under applicable law shall not be binding and Indemnitee shall not be required to reimburse the Company for any Expense Advance until a final
judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed). Indemnitee’s obligation to reimburse the Company for any Expense Advance shall be unsecured and no interest shall be
charged thereon. If there has not been a Change in Control (as defined in Section 10(c) hereof), the Reviewing Party shall be selected by the Board of Directors, and if there has been a Change in Control (other than a Change in Control which has
been approved by a majority of the Company’s Board of Directors who were directors immediately prior to such Change in Control), the Reviewing Party shall be the Independent Legal Counsel referred to in Section 1(c) hereof. If there has been no
determination by the Reviewing Party or if the Reviewing Party determines that Indemnitee substantively would not be permitted to be indemnified in whole or in part under applicable law, Indemnitee shall have the right to commence litigation seeking
an initial determination by the court or challenging any such determination by the Reviewing Party or any aspect thereof, including the legal or factual bases therefor, and the Company hereby consents to service of process and to appear in any such
proceeding. Any 

  

 -2- 

 
determination by the Reviewing Party otherwise shall be conclusive and binding on the Company and Indemnitee. 
  
 (c)   Change in Control.    The Company
agrees that if there is a Change in Control of the Company (other than a Change in Control which has been approved by a majority of the Company’s Board of Directors who were directors immediately prior to such Change in Control) then, with
respect to all matters thereafter arising concerning the rights of Indemnitee to the payment of Expenses and Expense Advances under this Agreement or any other agreement or under the Company’s Certificate of Incorporation or Bylaws as now or
hereafter in effect, Independent Legal Counsel (as defined in Section 10(d) hereof) shall be selected by Indemnitee and approved by the Company (which approval shall not be unreasonably withheld). Such Independent Legal Counsel, among other things,
shall render its written opinion to the Company and Indemnitee as to whether and to what extent Indemnitee would be permitted to be indemnified under applicable law and the Company agrees to abide by such opinion. The Company agrees to pay the
reasonable fees of the Independent Legal Counsel referred to above and to fully indemnify Independent Legal Counsel against any and all expenses (including attorneys’ fees), claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto. 
  
 (d)  Mandatory Payment of Expenses. Notwithstanding any other provision of this Agreement other than Section 9 hereof, to the extent that Indemnitee has been successful on the merits or otherwise, including, without
limitation, the dismissal of an action without prejudice, in defense of any action, suit, proceeding, inquiry or investigation referred to in Section (1)(a) hereof or in the defense of any claim, issue or matter therein, Indemnitee shall be
indemnified against all Expenses incurred by Indemnitee in connection therewith. 
  
 2.    Expenses; Indemnification Procedure. 
  
 (a)  Advancement of Expenses. The Company shall advance all Expenses incurred by Indemnitee. The advances to be made hereunder shall be
paid by the Company to Indemnitee as soon as practicable but in any event no later than five days after written demand by Indemnitee therefor to the Company. 
  
 (b)  Notice/Cooperation by Indemnitee.    Indemnitee shall, as a condition precedent to Indemnitee’s right to be
indemnified under this Agreement, give the Company notice in writing as soon as practicable of any Claim made against Indemnitee for which indemnification will or could be sought under this Agreement. Notice to the Company shall be directed to the
Chief Executive Officer of the Company at the address shown on the signature page of this Agreement (or such other address as the Company shall designate in writing to Indemnitee). In addition, Indemnitee shall give the Company such information and
cooperation as it may reasonably require and as shall be within Indemnitee’s power. 
  
 (c)  No Presumptions;    Burden of Proof. For purposes of this Agreement, the termination of any Claim by judgment, order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Indemnitee 

  

 -3- 

 
did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by
applicable law. In addition, neither the failure of the Reviewing Party to have made a determination as to whether Indemnitee has met any particular standard of conduct or had any particular belief, nor an actual determination by the Reviewing Party
that Indemnitee has not met such standard of conduct or did not have such belief, prior to the commencement of legal proceedings by Indemnitee to secure a judicial determination that Indemnitee should be indemnified under applicable law, shall be a
defense to Indemnitee’s claim or create a presumption that Indemnitee has not met any particular standard of conduct or did not have any particular belief. In connection with any determination by the Reviewing Party or otherwise as to whether
Indemnitee is entitled to be indemnified hereunder, the burden of proof shall be on the Company to establish that Indemnitee is not so entitled. 
  
         (d)  Notice to Insurers. If, at the time of the receipt by the Company of a notice of a
Claim pursuant to Section 2(b) hereof, the Company has liability insurance in effect that may cover such Claim, the Company shall give prompt notice of the commencement of such Claim to the insurers in accordance with the procedures set forth in the
respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such action, suit, proceeding, inquiry or investigation in accordance
with the terms of such policies. 
  
         (e)  Selection of Counsel. In the event the Company shall be obligated hereunder to pay the Expenses of any Claim, the Company shall be entitled to assume the defense of such
Claim with counsel approved by Indemnitee, which approval shall not be unreasonably withheld, upon the delivery to Indemnitee of written notice of its election so to do. After delivery of such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same Claim; provided that, (i) Indemnitee shall have the
right to employ Indemnitee’s counsel in any such Claim at Indemnitee’s expense and (ii) if (A) the employment of counsel by Indemnitee has been previously authorized by the Company, (B) Indemnitee shall reasonably have concluded that there
is a conflict of interest between the Company and Indemnitee in the conduct of any such defense, or (C) the Company shall not continue to retain such counsel to defend such Claim, then the fees and expenses of Indemnitee’s counsel shall be at
the expense of the Company. The Company shall have the right to conduct such defense as it sees fit in its sole discretion, including the right to settle any claim against Indemnitee without the consent of the Indemnitee. 
  
 3.    Additional Indemnification Rights;
Nonexclusivity. 
  
         (a)  Scope.    The Company hereby agrees to indemnify Indemnitee to the fullest extent permitted by law, notwithstanding that such indemnification is not
specifically authorized by the other provisions of this Agreement, the Company’s Certificate of Incorporation, the Company’s Bylaws or statute. In the event of any change after the date of this Agreement in any applicable law, statute or
rule that expands the right of a Delaware corporation to indemnify a member of its Board 

  

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of Directors or an officer, employee, agent or fiduciary, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater
benefits afforded by such change. In the event of any change in any applicable law, statute or rule that narrows the right of a Delaware corporation to indemnify a member of its Board of Directors or an officer, employee, agent or fiduciary, such
change, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement, shall have no effect on this Agreement or the parties’ rights and obligations hereunder except as set forth in Section 8(a) hereof.

  
         (b)  Nonexclusivity.    The indemnification provided by this Agreement shall be in addition to any rights to which Indemnitee may be entitled under the
Company’s Certificate of Incorporation or Bylaws, any agreement, any vote of stockholders or disinterested directors, the General Corporation Law of the State of Delaware, or otherwise. The indemnification provided under this Agreement shall
continue as to Indemnitee for any action Indemnitee took or did not take while serving in an indemnified capacity even though Indemnitee may have ceased to serve in such capacity. 
  
 4.    No Duplication of Payments.  The Company shall not be liable under this Agreement
to make any payment in connection with any Claim made against Indemnitee to the extent Indemnitee has otherwise actually received payment (under any insurance policy, Certificate of Incorporation, Bylaw or otherwise) of the amounts otherwise
indemnifiable hereunder. 
  
 5.  Partial
Indemnification.    If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses incurred in connection with any Claim, but not, however, for the total
amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such Expenses to which Indemnitee is entitled. 
  
 6.  Mutual Acknowledgement.    Both the Company and Indemnitee acknowledge that, in certain instances, Federal law or
applicable public policy may prohibit the Company from indemnifying its directors, officers, employees, agents or fiduciaries under this Agreement or otherwise. Indemnitee understands and acknowledges that the Company has undertaken or may be
required in the future to undertake with the Securities and Exchange Commission to submit the question of indemnification to a court in certain circumstances for a determination of the Company’s right under public policy to indemnify
Indemnitee. 
  
 7.  Liability
Insurance.    To the extent the Company maintains liability insurance applicable to directors, officers, employees, agents or fiduciaries, Indemnitee shall be covered by such policies in such a manner as to provide Indemnitee
the same rights and benefits as are accorded to the most favorably insured of the Company’s directors, if Indemnitee is a director; or of the Company’s officers, if Indemnitee is not a director of the Company but is an officer; or of the
Company’s key employees, agents or fiduciaries, if Indemnitee is not an officer or director but is a key employee, agent or fiduciary. 
  
 8.  Exceptions.    Any other provision herein to the contrary notwithstanding, the Company shall not be obligated
pursuant to the terms of this Agreement: 
  

 -5- 

 (a)    Excluded Action or Omissions.    To indemnify
Indemnitee for Indemnitee’s acts, omissions or transactions for which Indemnitee or the Indemnitee may not be indemnified under applicable law; or (ii) to indemnify Indemnitee for Indemnitee’s intentional acts, omissions or transactions in
violation of the Company’s policies; 
  
 (b)    Claims Initiated by Indemnitee.      To indemnify or advance expenses to Indemnitee with respect to Claims initiated or brought voluntarily by Indemnitee and not by way of
defense, except (i) with respect to actions or proceedings brought to establish or enforce a right to indemnification under this Agreement or any other agreement or insurance policy or under the Company’s Certificate of Incorporation or Bylaws
now or hereafter in effect relating to Claims for Indemnifiable Events, (ii) in specific cases if the Board of Directors has approved the initiation or bringing of such Claim, or (iii) as otherwise required under Section 145 of the Delaware General
Corporation Law, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advance expense payment or insurance recovery, as the case may be; 
  
 (c)    Lack of Good Faith.    To indemnify Indemnitee for any expenses
incurred by Indemnitee with respect to any proceeding instituted by Indemnitee to enforce or interpret this Agreement, if a court of competent jurisdiction determines that each of the material assertions made by Indemnitee in such proceeding was not
made in good faith or was frivolous; or 
  
 (d)    Claims Under Section 16(b).    To indemnify Indemnitee for expenses and the payment of profits arising from the purchase and sale by Indemnitee of securities in violation of Section
16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute. 
  
 9.    Period of Limitations.    No legal action shall be brought and no cause of action shall be asserted by or in the right of the Company against Indemnitee,
Indemnitee’s estate, spouse, heirs, executors or personal or legal representatives after the expiration of two years from the date of accrual of such cause of action, and any claim or cause of action of the Company shall be extinguished and
deemed released unless asserted by the timely filing of a legal action within such two-year period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action, such shorter period
shall govern. 
  
 10.    Construction of
Certain Phrases. 
  
 (a)  For purposes of this
Agreement, references to the “Company” shall include, in addition to the resulting corporation, any constituent entity (including any constituent of a constituent) absorbed in a consolidation or merger to which the Company is a party and
which, if its separate existence had continued, would have had the power and authority to indemnify its directors, officers, employees, agents or fiduciaries, so that if Indemnitee is or was a director, officer, employee, agent or fiduciary of such
constituent entity, or is or was serving at the request of such constituent entity as a director, officer, employee, agent or fiduciary of another entity, partnership, joint venture, employee benefit plan, trust or other enterprise, Indemnitee shall
stand in the same position under the provisions of this Agreement with respect to the resulting or surviving entity as Indemnitee would have with respect to such constituent entity if its separate existence had continued. 
  

 -6- 

 (b)  For purposes of this Agreement, references to “other enterprises” shall include
employee benefit plans; references to “fines” shall include any excise taxes assessed on Indemnitee with respect to an employee benefit plan; and references to “serving at the request of the Company” shall include any service as
a director, officer, employee, agent or fiduciary of the Company that imposes duties on, or involves services by, such director, officer, employee, agent or fiduciary with respect to an employee benefit plan, its participants or its beneficiaries;
and if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan, Indemnitee shall be deemed to have acted in a manner “not opposed to
the best interests of the Company.” 
  
 (c)  For
purposes of this Agreement, a “Change in Control” shall be deemed to have occurred if (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than a trustee or
other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, (A)
who is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing 10% or more of the combined voting power of the Company’s then outstanding Voting Securities, increases his beneficial ownership of such
securities by 5% or more over the percentage so owned by such person, or (B) becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing more than 20% of the
total voting power represented by the Company’s then outstanding Voting Securities, (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Company and any new
director whose election by the Board of Directors or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, or (iii) the stockholders of the Company approve 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 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 the stockholders of the Company approve a
plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of (in one transaction or a series of transactions) all or substantially all of the Company’s assets. 
  
 (d)  For purposes of this Agreement, “Independent Legal
Counsel” shall mean an attorney or firm of attorneys, selected in accordance with the provisions of Section 1(c) hereof, who shall not have otherwise performed services for the Company or Indemnitee within three years of the date on which they
are selected by indemnitee (other than with respect to matters concerning the rights of Indemnitee under this Agreement, or of other indemnitees under similar indemnity agreements). 
  

 -7- 

 (e)  For purposes of this Agreement, a “Reviewing Party” shall mean any appropriate
person or body consisting of a member or members of the Company’s Board of Directors or any other person or body appointed by the Board of Directors who is not a party to the particular Claim for which Indemnitee is seeking indemnification, if
applicable, or Independent Legal Counsel. 
  
 (f)  For
purposes of this Agreement, “Voting Securities” shall mean any securities of the Company that vote generally in the election of directors. 
  
 11.    Counterparts.    This Agreement may be executed in one or more counterparts, each of which shall
constitute an original and all of which shall constitute one and the same instrument. 
  
 12.    Binding Effect; Successors and Assigns.    This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their
respective successors, assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company, spouses, heirs, and personal and legal
representatives. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all, or a substantial part, of the business and/or assets of the Company, by
written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken
place. This Agreement shall continue in effect with respect to Claims relating to Indemnifiable Events regardless of whether Indemnitee continues to serve as a director, officer, employee, agent or fiduciary of the Company or of any other enterprise
at the Company’s request. 
  
 13.    Attorneys’ Fees.    In the event that any action is instituted by Indemnitee under this Agreement or under any liability insurance policies maintained by the Company to enforce or
interpret any of the terms hereof or thereof, Indemnitee shall be entitled to be paid all Expenses incurred by Indemnitee with respect to such action, regardless of whether Indemnitee is ultimately successful in such action, and shall be entitled to
the advancement of Expenses with respect to such action, unless, as a part of such action, a court of competent jurisdiction over such action determines that each of the material assertions made by Indemnitee as a basis for such action was not made
in good faith or was frivolous. In the event of an action instituted by or in the name of the Company under this Agreement to enforce or interpret any of the terms of this Agreement, Indemnitee shall be entitled to be paid all Expenses incurred by
Indemnitee in defense of such action (including costs and expenses incurred with respect to Indemnitee counterclaims and cross-claims made in such action), and shall be entitled to the advancement of Expenses with respect to such action, unless, as
a part of such action, a court having jurisdiction over such action determines that each of Indemnitee material defenses to such action was made in bad faith or was frivolous. 
  
 14.    Notice.    All notices and other communications required or permitted
hereunder shall be in writing, shall be effective when given, and shall in any event be deemed to be given (a) five (5) days after deposit with the U.S. Postal Service or other applicable postal service, if delivered by first class mail, postage
prepaid, (b) upon delivery, if delivered by hand, (c) one business day after the business day of deposit with Federal Express or similar overnight courier, freight prepaid, or (d) one day after 
  

 -8- 

 the business day of delivery by facsimile transmission, if delivered by facsimile transmission, with copy by first class
mail, postage prepaid, and shall be addressed, if to Indemnitee, at the Indemnitee’s address as set forth beneath Indemnitee’s signature to this Agreement and, if to the Company, at the address of the Company’s principal corporate
offices (attention: Chief Executive Officer) or at such other address as such party may designate by ten days’ advance written notice to the other party hereto. 
  
 15.    Consent to Jurisdiction.    The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of Delaware for all purposes in connection with any action or proceeding that arises out of or relates to this Agreement and agree that any action instituted under this Agreement
shall be commenced, prosecuted and continued only in the Court of Chancery of the State of Delaware in and for New Castle County, which shall be the exclusive and only proper forum for adjudicating such a claim. 
  
 16.    Severability.    The
provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise
unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without limitations, each portion of this
Agreement containing any provision held to be invalid, void or otherwise unenforceable, that is not itself invalid, void or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or
unenforceable. 
  
 17.    Choice of
Law.    This Agreement shall be governed by and its provisions construed and enforced in accordance with the laws of the State of Delaware, as applied to contracts between Delaware residents, entered into and to be performed
entirely within the State of Delaware, without regard to the conflict of laws principles thereof. 
  
 18.    Subrogation.    In the event of payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such
rights. 
  
 19.    Amendment and
Termination.    No amendment, modification, termination or cancellation of this Agreement shall be effective unless it is in writing signed by both the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. 
  
 20.    Integration and Entire Agreement.    This Agreement sets forth the entire understanding between the
parties hereto and supersedes and merges all previous written and oral negotiations, commitments, understandings and agreements relating to the subject matter hereof between the parties hereto. 
  

 -9- 

 21.    No Construction as Employment Agreement.    Nothing
contained in this Agreement shall be construed as giving Indemnitee any right to be retained in the employ of the Company or any of its subsidiaries. 
  

 -10- 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

  

	        PALMSOURCE, INC.
		
	 	 	

	 	 	 David C. Nagel
 President and Chief
Executive Officer
  
 Address:    1240 Crossman
Avenue
                     Sunnyvale, California
94089

  

	AGREED TO AND ACCEPTED BY:     
		
	Signature:	 	  

		
	Printed Name:	 	  

		
	 Address:
	 	  

	
	  

	
	  

  
  

 -11-

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