Motorola announced today it had reached an agreement with Carl Icahn, a shareholder with 6.4% stake, who filed a lawsuit against the company a few weeks ago.
Icahn took legal action against the company to gain access to undisclosed target documents. However, observers commented that this was a part of a proxy war between the handset manufacturer and Icahn on who would be elected on the board.
Motorola and Icahn came to an agreement under which William Hambrecht and Keith Meister will be nominated for election to the company’s board of directors at the 2008 Annual Meeting of Shareholders. In addition, Meister has been appointed to serve on the Board, with immediate effect.
In exchange, Icahn has agreed not to solicit proxies in connection with the 2008 annual meeting and to vote its shares in support of the Boards director nominees.
Furthermore, all pending litigation between Motorola and Icahn will be dismissed.
Motorola also declared it would seek input from Icahn in significant matters regarding the separation of the Mobile Devices business. These matters will include the search for a new CEO for the handset manufacturer.
Motorola’s president and CEO Greg Brown said in a prepared statement: ‘We are pleased to have reached this agreement with Carl Icahn. We look forward to continuing the process we announced on 26 March to create two independent, publicly traded companies and we are pleased to avoid a costly and distracting proxy contest.’