UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) ~~August~~September 2422, 2005

PalmSource, Inc.

(Exact name of registrant as specified in charter)

Delaware

000-50402

77-0586278

(State or other jurisdiction

of incorporation)

(Commission File Number)

(IRS Employer

Identification No.)


1188 East Arques Avenue, Sunnyvale CA		94085-4602
(Address of principal executive offices)		(Zip Code)

(408) 400-3000

Registrant’s telephone number, including area code

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under Exchange Act (17 CFR 240.13e-4(c))

Item 12.0102. ~~Entry~~Results ~~into~~of aOperations ~~Material~~and ~~Definitive~~Financial ~~Agreement~~Condition.

On ~~August~~September 2422, 2005, ~~the~~PalmSource, ~~Compensation~~Inc., ~~Committee~~a ~~(the~~Delaware corporation (“~~Committee~~PalmSource”) of, ~~the~~issued ~~Board~~a ofpress ~~Directors~~release ofannouncing ~~PalmSource,~~its ~~Inc.~~financial ~~(“PalmSource”~~results orfor the ~~“Company”)~~first ~~approved~~fiscal ~~the~~quarter ~~implementation~~ended ofSeptember ~~certain~~2, ~~compensation~~2005 and ~~retention~~certain ~~matters~~other ~~with~~information. ~~respect~~A tocopy of the ~~Company’s~~press ~~executive~~release ~~officers~~is ~~previously~~furnished ~~considered by~~as ~~the~~Exhibit ~~Committee~~99.1 into ~~June~~this ~~2005.~~Form 8-K.

InThe ~~June~~attached ~~2005,~~press ~~the~~release ~~Committee approved~~contains ancertain ~~Interim~~non-GAAP ~~CEO~~financial measures. Q1For ~~FY06~~purposes ~~Bonus Plan~~ of ~~$50,000~~Regulation ~~for Patrick McVeigh~~G, ~~the~~a ~~Company’s~~non-GAAP ~~interim~~financial ~~CEO,~~measure ~~provided~~is hea ~~remains~~numerical inmeasure ~~the~~of ~~capacity~~a ofcompany’s ~~interim~~performance, ~~CEO~~financial position, or iscash ~~serving~~flows asthat ~~permanent~~either ~~CEO~~excludes onor ~~the~~includes ~~last~~amounts ~~day~~that ofare ~~the~~not ~~first~~normally ~~fiscal~~excluded ~~quarter~~or ~~and~~included ~~that~~in the ~~Committee~~most ~~determines~~directly ~~that~~comparable ~~Mr.~~measure ~~McVeigh~~calculated ~~has~~and ~~met~~presented ~~all performance goals as outlined~~ in ~~the~~accordance ~~Interim~~with ~~CEO Q1 FY06 Bonus Plan~~GAAP. OnAs ~~August~~used 24herein, ~~2005,~~“GAAP” ~~the~~refers ~~Committee~~to ~~approved~~accounting aprinciples ~~performance~~generally ~~bonus~~accepted ~~plan~~in ~~for~~ the ~~remainder~~United ofStates. ~~fiscal~~To ~~year~~supplement ~~2006~~our ~~for~~consolidated ~~Mr.~~financial ~~McVeigh, a~~statements ~~summary~~presented ofin ~~which~~accordance iswith ~~attached~~GAAP, ~~hereto~~PalmSource ashas ~~Exhibit~~supplied ~~99.1~~non-GAAP ~~and~~measures isof ~~incorporated~~net ~~herein~~income by(loss) ~~reference.~~and ~~Pursuant~~earnings toper ~~the bonus plan~~share, ~~Mr.~~which ~~McVeigh~~are ~~will~~adjusted befrom ~~eligible~~results ~~for~~based aon ~~performance~~GAAP ~~bonus~~to ofexclude ~~$50,000~~certain ~~for~~expenses. ~~his~~We ~~services~~believe inthat ~~each~~these ofnon-GAAP ~~the~~measures ~~remaining three quarters of~~provide ~~fiscal~~useful ~~year~~information ~~2006,~~to ~~provided~~both ~~that~~management heand ~~remains~~investors inby ~~the~~excluding ~~capacity~~certain ofexpenses ~~interim~~that ~~CEO~~may ~~and~~not ~~meets~~be ~~all~~indicative of ~~the~~our ~~performance~~core ~~goals~~operating ~~for~~results. ~~each~~These ~~such~~measures ~~quarter.~~should Ifbe ~~Mr.~~considered ~~McVeigh~~in ~~ceases~~addition to ~~serve~~results asprepared ~~interim~~in ~~CEO~~accordance ~~during~~with ~~any of the remaining quarters of fiscal year 2006~~GAAP, ~~and provided~~but ~~Mr.~~are ~~McVeigh has~~ not ~~terminated~~a substitute ~~his employment with the Company~~ for ~~any reason (including death~~ or ~~disability)~~superior orto ~~been~~GAAP ~~terminated by the Company for cause, Mr~~results. ~~McVeigh~~These ~~will~~non-GAAP bemeasures ~~eligible~~included ~~for a prorated portion of such bonus for the quarter~~ in ~~which~~ ~~he ceases to so serve. Upon termination of Mr. McVeigh’s services as interim CEO, Mr. McVeigh’s compensation will be governed by~~ the ~~terms~~attached ofpress ~~his~~release ~~offer~~have ~~letter,~~been ~~which~~reconciled ~~was effective February 7, 2005 and was previously filed with the SEC as an exhibit~~ to the ~~Company’s~~nearest ~~Form~~GAAP ~~8-K filed on February 10, 2005~~measure.

The ~~Committee~~press release also ~~reviewed~~includes ~~the~~“safe ~~overall~~harbor” ~~compensation~~language ofindicating ~~Michael~~that ~~Kelley,~~certain ~~who~~statements ~~was~~about ~~recently~~PalmSource’s ~~promoted~~business toand ~~the~~other ~~position~~matters contained ofin ~~Senior~~the ~~Vice~~press ~~President,~~release ~~Research~~are ~~and~~“forward-looking” ~~Development,~~rather ~~and~~than ~~determined~~“historic.” ~~that,~~A inmore ~~light~~thorough discussion of ~~Mr.~~certain ~~Kelley’s expanded~~factors ~~responsibilities~~which ~~and~~may ~~his~~affect ~~critical role in the Company~~PalmSource’s ~~strategic~~operating ~~plans,~~results it is ~~appropriate~~included, toamong ~~enhance~~other ~~the~~sections, ~~performance~~under ~~and~~the ~~retention~~captions “Risk ~~incentives~~Factors” ~~for~~and ~~Mr.~~“Management’s ~~Kelley.~~Discussion ~~Accordingly,~~and ~~the~~Analysis ~~Committee~~of ~~approved~~Financial aCondition ~~grant~~and toResults ~~Mr. Kelley~~ of anOperations” ~~option~~in ~~to purchase~~PalmSource’s upAnnual toReport ~~50,000~~on ~~shares~~Form of10-K for the ~~Company’s~~fiscal ~~common~~year ~~stock,~~ended ~~25%~~June of3, 2005 which ~~will~~is ~~vest~~ on ~~the~~file ~~first~~with ~~anniversary of~~ the ~~grant~~SEC and ~~date~~available ~~and~~at the ~~remainder~~SEC’s ~~will~~website ~~vest monthly thereafter over 36 months~~(http://www.sec.gov).

As previously disclosed by the Company in June 2005, the Committee determined that continuity and retention of the interim CEO, Chief Financial Officer and Senior Vice President, Research and Development is important to the Company in order to develop and implement the Company’s strategic plan. As part of this retention program, in June 2005, the Committee reviewed a retention plan for fiscal year 2006 and approved certain grants of fully vested shares of common stock to these executives to be issued at the end of the first fiscal quarter of 2006, provided that Mr. McVeigh, Ms. Jeanne Seeley and Mr. Kelley are individually serving in their respective capacities as interim CEO, Chief Financial Officer and Senior Vice President, Research and Development on the last fiscal day of the first quarter of fiscal year 2006. Consistent with the previously expressed intention to develop a retention program for the key executives for the remainder of fiscal year 2006, on August 24, 2005, the Committee approved retention grants to these executives for the remaining three quarters of the fiscal year. The number of shares of restricted stock granted to each executive officer is set forth below, with each grant vesting with respect to one-third of the shares at the end of the second, third and fourth fiscal quarter, respectively, provided that Mr. McVeigh, Ms. Seeley and Mr. Kelley are individually serving in their respective capacities as interim CEO, Chief Financial Officer and Senior Vice President, Research and Development on the last fiscal day of each such quarter.

Executive		Shares of Common Stock
Patrick McVeigh, interim CEO		19,500
Jeanne Seeley, Chief Financial Officer		16,500
Michael Kelley, Senior Vice President, Research and Development		7,950

Item 9.01. Financial Statements and Exhibits.

99.1 ~~Summary~~. ofPress release dated September 22, 2005 containing financial information for PalmSource, Inc. for the ~~Interim~~first ~~CEO~~fiscal ~~FY06~~quarter ~~Bonus~~ended ~~Plan~~September 2, 2005.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

	PalmSource, Inc.
Date: August 25, 2005	By:	/s/ Jeanne Seeley
Date: September 22, 2005	By:	/s/ Jeanne Seeley
		Jeanne Seeley
		Chief Financial Officer

EXHIBIT INDEX

Exhibit No.		Description of Exhibits.
99.1		~~Summary~~Press ofRelease, dated September 22, 2005, containing financial information for PalmSource, Inc. for the ~~Interim~~first ~~CEO~~fiscal ~~FY06~~quarter ~~Bonus~~ended ~~Plan~~September 2, 2005.

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