Hello Moto

CHICAGO (AP) -- Motorola Inc. settled its proxy battle with Carl Icahn on Monday, agreeing to back two of the billionaire investor's nominees for its board of directors in exchange for him dropping litigation against the cell phone maker.

The agreement avoids a showdown at the company's upcoming annual meeting for what would have been the second straight year.

Motorola named Keith Meister, a managing director of Icahn investment funds, to its board and said it will nominate both him and fellow Icahn nominee William Hambrecht for director slots. The agreement virtually ensures that both will be elected at the company's shareholder meeting next month.

Schaumburg, Ill.-based Motorola also will seek input from Icahn on the planned separation of its mobile devices operations and search for a chief executive for that business under the terms of the agreement.

Icahn agreed not to solicit proxies at the annual meeting, to dismiss litigation against the company and to vote his shares in support of all of the board's director nominees.

Motorola still faces an uphill challenge with its troubled cell phone unit but said it was pleased to have reached the agrement with Icahn."We believe that this matter has been resolved in a manner that serves the best interests of our shareholders and prevents a costly and distracting proxy contest," Motorola spokeswoman Jennifer Erickson said. "We and Mr. Icahn share a common interest in positioning all of our businesses to deliver an enhanced shareholder value."

Shares in the company rose 14 cents to $9.81 in morning trading Monday.