Yahoo! Pacifies Icahn With Board Seat

Internet portal Yahoo! (YHOO Quote) has settled its pending proxy contest with Carl Icahn, and, as part of the agreement, will name the activist investor to its board.

Eight members of Yahoo!'s current board will stand for re-election at the 2008 annual meeting: Roy Bostock, Ronald Burkle, Eric Hippeau, Vyomesh Joshi, Arthur Kern, Mary Agnes Wilderotter, Gary Wilson and co-founder and CEO Jerry Yang. Because of the deal with Icahn, Robert Kotick won't seek another term.

Following the annual meeting, the Yahoo! board will be expanded to 11 members. Icahn will be appointed as a director and the remaining two seats will be filled based on the recommendation of the board's nominating and governance committee from a list of nine candidates proposed by Icahn.

Icahn's candidates includes the eight remaining members of the slate he offered earlier and Jonathan Miller, currently a partner in Velocity Interactive Group and former chairman and CEO of AOL.

Additionally, Icahn, who owns nearly 69 million shares, or 4.98% of Yahoo!'s common stock, has agreed to withdraw his nominees for consideration at the annual meeting and to vote his Yahoo! shares in favor of the board's nominees.

Icahn had been trying to gain control of the company since a takeover bid by Microsoft (MSFT Quote), aimed at better taking on Internet giant Google (GOOG Quote), was rejected by Yahoo!.

Shares of Yahoo! were down 4% in premarket trading Monday.