UPDATE 1-Palm says underwriters exercise option

* Over-allotment option to purchase 3 mln more shares

* Reaffirms FY2010 outlook

SAN FRANCISCO, Sept 24 (Reuters) - Palm Inc PALM.O said on Thursday underwriters of its stock offering have fully exercised their option to purchase more shares, and the smartphone maker reaffirmed its outlook for the year.

Palm yesterday increased the size of the offering to 20 million shares at a price to the public of $16.25 each.

Underwriters exercised their over-allotment option in full to purchase 3 million additional shares, bringing the expected total net proceeds of the offering to $359.9 million.

Goldman Sachs (GS.N) and JPMorgan (JPM.N) are joint bookrunners for the deal.

Palm also reaffirmed the fiscal 2010 outlook it provided just last week, along with planned product and carrier launches in the second half of the fiscal year.

Palm's fiscal 2010 forecast calls for non-GAAP revenue of $1.6 to $1.8 billion.

Shares of Sunnyvale, California-based Palm closed at $16.16 on the Nasdaq and fell to $16.01 in extended trading. (Reporting by Gabriel Madway; Editing by Gary Hill)