By Aidan Malley

Published: 07:25 PM EST

In an attempt to reverse the course of its ailing smart phone business, Palm has taken a cash infusion from a private equity group and hired two of Apple's better-known former executives.

On Wednesday, shareholders from the Sunnyvale, Calif.-based company agreed to a deal with investment group Elevation Partners that would provide a direct $325 million boost as well as an extra $400 million through debt financing and an opportunity to restructure its equity plans. The approval completes a transaction first proposed in June.

In return, Elevation Partners would gain an approximately 25 percent stake in the company. Shareholders would also receive $9 per share in exchange for the reduced value of their holdings.

The move was characterized as a revitalization effort by Palm, whose entire Treo smart phone line fell behind Apple in sales during July despite Palm's veteran status in the market. The company recently suffered embarrassment after canceling its notebook-like Foleo phone companion before an actual launch and has often been accused of allowing the Treo to languish despite competition from the BlackBerry and other, sometimes more advanced products.

"We appreciate our stockholders' strong support of these proposals and look forward to an era of renewed innovation and focused execution at Palm," claimed company president Ed Colligan.

Potentially more relevant in the transaction, however, is the addition of two recently departed Apple executives to the phone maker's Board of Directors in connection with the deal. Although Palm would not explain the reasoning behind either decision, it agreed to appoint Apple's former senior engineering VP, Jon Rubinstein, as executive chairman and previous chief financial officer, Fred Anderson, as a general board member.

Rubinstein is widely believed to have been recruited in an attempt to translate his success with the iPod to Palm. Before leaving Apple in October 2005, Rubinstein was best known for heading and completing development of the original iPod jukebox in just eight months -- a feat which ultimately led to Apple's second resurgence and its near-total dominance of music players in the US. The executive was also one of the first senior staffers to be hired after the return of Steve Jobs in 1997 and led the engineering efforts behind the first iMac.

Fred Anderson's role is less certain, but may unintentionally cloud Palm's efforts to restore confidence in its name. The executive helped form Elevation Partners in March 2005 but managed Apple's finances from 1996 until his retirement from the electronics giant in 2004, when he joined the latter's own Board of Directors. It was during his original tenure that he reportedly backdated stock options improperly for Apple chief Steve Jobs. Anderson denied any culpability but agreed to a financial settlement with the Securities and Exchange Commission to avoid further legal trouble. Apple formally distanced itself from Anderson in the process.