Filed by Palm, Inc. Pursuant to Rule 425
Under the Securities Act of 1933
And Deemed Filed Pursuant to Rule 14a-12
Under the Securities and Exchange Act of 1934
Subject Company: Extended Systems Incorporated
Commission File No.: 000-23597

TEXT AND SLIDE PRESENTATION REGARDING PROPOSED TRANSACTION FROM WEB SITE ACCESSED BY EMPLOYEES ON MARCH 6, 2001:

        You've entered Joining Palm, a special Web site to keep you up-to-date. Catch up on the latest news. Get the answers you need. You'll find it all right here.

        Welcome!

        I'm excited that Extended Systems is joining Palm. I'm excited about our shared vision and prospects. And I'm truly excited about Palm's future.

        Palm's future will be fueled by the innovation, creativity and skills of every individual on the team. Your contributions are important and will make a difference.

        During the transition period, you'll be hearing more about Palm's business strategy and how we'll be working together. We've also made answering your questions and providing information about the people-side of the business a priority.

        Again, welcome. We're delighted to have you on board.

        /s/ Carl Yankowski

        Carl Yankowski
        CEO
        Palm, Inc.

       Additional information and where to find it

        In connection with the proposed transaction, Palm will file a registration statement on Form S-4, including a proxy statement-prospectus, with the Securities and Exchange Commission. Investors and security holders are advised to read the registration statement, including the proxy statement-prospectus when they become available because they will contain important information about the proposed acquisition. Investors and security holders may obtain a free copy of the registration statement and the proxy statement-prospectus (when available) and other documents filed by Palm with the Securities and Exchange Commission at the Securities and Exchange Commission's Web site at www.sec.gov. Free copies of the registration statement (when available) and other documents filed by Palm with the Securities and Exchange Commission may also be obtained from Palm by directing a request to Palm.

        Extended Systems and its directors and executive officers may be deemed to be participants in the solicitation of proxies from Extended Systems stockholders in favor of the proposed transaction. Information regarding interests of the officers and directors of Extended Systems in the proposed acquisition will be set forth in the proxy statement-prospectus (when available). In addition, information regarding such officers and directors is included in Extended Systems' Proxy Statement for its 2000 Annual Meeting of Stockholders filed with the Securities and Exchange Commission on September 20, 2000. This document is available free of charge at the Securities and Exchange Commission's Web site at www.sec.gov and from Extended Systems.

        About the Transition

        We'll keep you up-to-date on transition activities and decisions. Here's a brief overview of what you can expect to happen in the next few months...

        March

• Registration statements are filed.
• Transition planning begins. Transition team, made up of Palm and Extended Systems representatives, is named.
• This Web site goes live. Keep checking it for the latest!

        April - May

• Transition planning continues.
• Palm HR representatives visit Extended Systems' sites regularly to answer your questions.

        Late May - early June

• Transaction closes when regulatory approval is complete.

        Frequently Asked Questions (FAQs)

        You've got questions. We've got answers.

        This section offers answers to common questions about the transition. Read on to get the inside scoop. If you don't find what you are looking for here, you can use the Feedback section to submit your questions.

        Business questions
People questions

        Business questions

        Q: What does this acquisition accomplish?
A: The addition of Extended Systems makes Palm one of the only single vendors that can provide both handheld computers and enterprise-class mobile infrastructure software and support.

        Extended Systems significantly strengthens Palm's ability to offer a suite of products, applications and services for the Enterprise. Palm will now be able to provide CIOs with a comprehensive, behind-the-firewall solution that seamlessly supports multiple mobile operating systems and devices (including the Palm family of handheld devices), groupware and Internet applications.

        In addition, Extended Systems brings:

• An established customer base and experience working with corporate enterprise customers.
• Leading synchronization and handheld management technology.
• International presence and an infrastructure/network of offices.
• Alliances with additional partners, such as Compaq, Lotus, HP, Microsoft, Ericsson, iPlanet and Psion.
• The opportunity to deepen relationships with IBM and Symbol Technologies.
• Bluetooth technology and expertise.
• Engineering talent, a sales force and management team - all with an Enterprise orientation.

        Q: What is Palm's position in the Enterprise today?
A: Palm holds the leadership position today with the largest number of partners and applications in the mobile space. A significant percentage of the Palm Economy is focused on the Enterprise.

• Hundreds of companies have standardized on Palm, including more than 130 of the Fortune 500.
• Eighty percent of Palm handhelds are synchronized at work.
• Forty percent of Palm handhelds are paid for and/or reimbursed by companies (a higher rate than the industry average).

• Palm and the Palm Economy offer handheld solutions that provide mobile access to corporate e-mail, the first of many important mobile office applications.

        Q: What does Extended Systems get that we couldn't get going it alone?
A: You gain the following:

• Palm's brand and leadership in the handheld segment (endorsement).
• Leverage that results from alignment with the leading handheld computing platform, including access to the Palm OS development community.
• Marketing and channel presence.
• Palm's breadth of strategic relationships, including those with Enterprise Sis, ISVs, and wireless vendors and carriers.

        Q: How does Extended Systems' technology fit with other acquired technologies, such as WeSync? What about ActualSoft and Anyday.com technologies?
A:

• Extended Systems' mobile services infrastructure provides a platform on which WeSync's n-way syncing capability can be delivered. WeSync brings a talented engineering team to Palm, while Extended Systems brings a complete infrastructure software business.
• The alignment between Extended Systems and AnyDay.com will be enhanced.
• Palm's previous acquisition of ActualSoft brought a leading Enterprise handheld e-mail client to Palm.
• All of these acquisitions fill out different elements of Palm's overall mobile solutions architecture.

       Q: Does Palm plan to keep the Extended Systems name and/or its product names?
A: Yes, at least in the short-term. Later, we will determine the optimal branding/product naming convention for our business.

        Q: Will Palm use HotSync Server or Extended Systems' XTNDConnect product or support both?
A: Palm plans to migrate existing HotSync customers to the XTNDConnect product offering. It will support customers through the transition. Enterprise customers will be hearing more on the details of this program from their Palm or Extended Systems Enterprise sales representatives.

       Q: What devices and databases will the Palm/Extended Systems solution support?
A: The mobile synchronization and management software will continue to support:

• Palm
• PocketPC
• Symbian/EPOC

• WAP and RIM devices supporting Microsoft Exchange
• Lotus Notes/Domino
• IMAP
• SMTP
• LDAP
• ICAL
• Any ODBC-compliant database application

        People questions

         Q: Where will Extended Systems fit into Palm once the acquisition is complete?
A: Extended Systems will become part of Palm's Enterprise business unit, which will be headed by Steve Simpson.

        Q. When will we change to Palm benefits?
A. You'll transition to Palm benefits as soon as the acquisition is completed. There will be no lapse in coverage. Keep checking About Benefits for information as it develops.

        Q: Once the transaction is completed, will there be a change in our paydays?
A: U.S.-based Palm employees are semimonthly. Non-U.S.-based employees are paid monthly. For more information about pay practices, go toAbout Pay.

        Q: How is overtime paid at Palm?
A: U.S. non-exempt, full-time employees are eligible for additional pay for work performed beyond their regularly scheduled daily and weekly hours. This can vary by state. Hours at Palm are generally 8:30 a.m. to 5 p.m. Monday through Friday, with a half-hour lunch period each day. After an employee has worked the normal 40 hours, all additional time is paid at a rate of 1 1/2 times the employee's hourly rate. Depending on company work needs, employees are required to work overtime when requested.

        If you do not live in the U.S., overtime policies and pay practices vary from one country to another based on local laws and customs.

        Q. How does Palm's 401(k) plan compare with Extended Systems' plan?
A. Palm's 401(k) plan, available to U.S. employees, is with Fidelity Investments - the same as Extended Systems' plan. However, the investment funds are not exactly the same. Palm's company matching contribution is comparable to Extended Systems' 3% maximum match. But with the Palm 401(k), you can contribute more pre-tax - up to 22% of your gross pay (versus 15% at Extended Systems).

        Q. What if I have a 401(k) loan? What will happen?
A. During the transition, we will be working closely with Fidelity in transferring all employee accounts to the Palm 401(k) Plan. Any outstanding loans will also transfer.

      Q. In moving to Palm, will we get credit for years of service?
A. Yes. Years of service count for all Palm benefits, including stock option vesting, 401(k) matching contributions and all other benefits.

      Q. How soon after the acquisition will we be connected to Palm via e-mail, phone, etc.?
A. Getting everyone connected is an essential part of the transition. How soon that happens depends on a number of factors, but our goal is connectivity - including e-mail, phone and the intranet - as soon as possible after the deal is closed. We'll keep you in the loop and give you specific dates as soon as we know them. In the meantime, use this Web site to keep posted on the latest transition news.

      One thing to keep in mind: Palm is still a new company. We're barely a year old and are still building our infrastructure. For this reason, you can expect some bumps during the transition. Be patient ... and if you see ways to improve the process, we welcome your suggestions. Visit the Feedback section to submit your suggestions.

      Q: Is there a resource that provides more details about Palm or the acquisition?
A:

• The transition team will meet regularly, and their decisions and other transition-related information will be posted on this Web site.
• Palm HR representatives will visit your location regularly throughout the transition to answer your questions.
• You can access the Feedbackpage any time and any day if you have specific questions or suggestions related to the acquisition.
• Palm's Web site, www.palm.com, contains a wealth of information.
• Soon after the acquisition is completed, a full new-hire orientation will be held. A Palm team will provide details of Palm's history, organizational structure, the "Zen of Palm" and more.