Two people Icahn has backed for the board will be nominated to it, and one
will be seated immediately, the company and Icahn said in a statement Monday.
In addition, Motorola agreed to seek input from Icahn regarding the spinoff
of the company's handset division and the search for a leader of that unit.
As part of the deal, all pending litigation between Motorola and Icahn will
Icahn owns about 6.4 percent of Motorola. He has been pressuring the wireless
network and handset maker for several months, at first waging an unsuccessful
battle for shareholders' proxy votes to get elected to the board himself. He
also has argued that Motorola would be worth more broken up than as a whole.
Icahn attacked while Motorola was suffering weak financial results after profits
from its popular Razr handset faded and it failed to come up with another hit
The pressure may have succeeded. CEO Ed Zander stepped down late last year,
and last month the company announced plans to separate the handset division
from its enterprise and home network units in 2009. Motorola would become two
companies, each with its own stock. The plan still needs some approvals.
Hambrecht, founder, chairman and CEO of financial services firm WR Hambrecht
+ Co., and Icahn investment funds managing director Keith
Meister, will be nominated for the board at the company's 2008 Annual Meeting
of Shareholders as part of the deal announced Monday. Meister also was appointed
to begin serving on the board immediately. Hambrecht and Meister are allowed
to communicate with Icahn about the board's activities, subject to certain confidentiality
rules, according to the statement.
Icahn invests broadly and has a reputation for using his ownership of large
stakes in various companies to bring about changes. Last year he demanded that
BEA shareholders be allowed to vote on Oracle's proposal to buy the enterprise
software maker. The deal passed a special shareholder vote last week. In 2005,
he told Time Warner to reverse its troubled 2000 acquisition of AOL. It never