SUNNYVALE, Calif. - As expected, shareholders of struggling Palm Inc. approved Wednesday the partial sale of the company to a private equity firm and a change in the board's makeup.

Under the capital restructuring, Elevation Partners will pay $325 million in cash for a 25 percent stake in the company, and Palm will pay a special distribution of $9 per share, or about $940 million in cash, to shareholders for their reduction in ownership.

Palm will also get a new executive board chair — Jonathan Rubinstein, the former head of Apple Inc.'s iPod division — after the transaction closes.

Elevation partners Fred Anderson, Apple's former chief financial officer, and Roger McNamee, a veteran Silicon Valley investor, will also join the board, replacing outgoing directors Eric Benhamou and Bruce Dunlevie. D. Scott Mercer, who previously announced his resignation, will remain on the board.