Palm is dead... Long live Palm.

The handheld computer maker Tuesday said its shareholders have approved a three-part proposal that lets Palm Inc. acquire rival Handspring and then split into two companies palmOne (hardware) and PalmSource (software). The company said stockholders of both companies approved the transaction worth an estimated $169 million in stock at Palm's annual stockholders meeting.

Under the terms of the deal, Palm will distribute all the shares of PalmSource it owns (approximately 86 percent of the total) to Palm stockholders of record as of the close of business Tuesday. Those Palm stockholders will receive approximately 0.31 shares of PalmSource common stock for each share of Palm common stock they own.

Handspring's acquisition is being completed as a merger with Palm issuing approximately 13.9 million shares to Handspring stockholders. In turn, Handspring's stockholders will receive 0.09 Palm shares for each share of Handspring common stock owned.

Also as part of the deal, PalmSource stock will begin trading on the NASDAQ stock market Wednesday under the ticker symbol: PSRC. In addition, the PALM and HAND ticker symbols will cease to trade. palmOne's stock will trade on the NASDAQ stock market under the ticker symbol: PLMO.

"Today's stockholder vote approving the spin out brings enormous promise for the mobile device and smartphone markets, which will continue growing in quality and excellence as PalmSource and palmOne sharpen focus in their respective businesses," chairman of PalmSource and palmOne, Eric Benhamou said in a statement.